UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2004 - or - [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from __________ to__________ Commission File Number 001-15185 FIRST HORIZON NATIONAL CORPORATION (Exact name of registrant as specified in its charter) TENNESSEE 62-0803242 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 165 Madison Avenue, Memphis, Tennessee 38103 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including Area Code: 901-523-4444 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on which Registered - ------------------- ------------------------------------ $0.625 Par Value Common Capital Stock New York Stock Exchange, Inc. (including rights attached thereto) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X YES NO --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X --- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). X YES NO --- --- At June 30, 2004, the aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant was approximately $5.5 billion. At February 25, 2005, the registrant had 123,900,266 shares of common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE: 1. Portions of Proxy Statement to be furnished to shareholders in connection with Annual Meeting of Shareholders scheduled for 4/19/05 - Parts I, II, III and IV. PART I ITEM 1 BUSINESS General. First Horizon National Corporation (the "Corporation") is a Tennessee corporation headquartered in Memphis, Tennessee and incorporated in 1968. The Corporation is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, and is a financial holding company under the provisions of the Gramm-Leach-Bliley Act. At December 31, 2004, the Corporation had total assets of $29.8 billion and ranked 1st in terms of total assets among Tennessee-headquartered bank holding companies and ranked 28th nationally. Through its principal subsidiary, First Tennessee Bank National Association (the "Bank"), and its other banking-related subsidiaries, the Corporation provides diversified financial services through four business segments. The segments reflect the common activities and operations of aggregated business segments across the various delivery channels: Retail/Commercial Banking, Mortgage Banking, and Capital Markets. In addition, the Corporate segment provides essential support within the Corporation. The percentage of consolidated revenues (for this purpose, the sum of net interest income and noninterest income) ascribed to each of our segments for the past three years was: Retail/Commercial Banking, 53% (2004), 42% (2003), and 46% (2002); Mortgage Banking, 28% (2004), 35% (2003), and 29% (2002); Capital Markets, 17% (2004), 22% (2003), and 22% (2002); and Corporate, 2% (2004), 1% (2003), and 3% (2002). Financial and other additional information concerning our segments appears in the response to Item 7 of Part II hereof and Note 22 to the Consolidated Financial Statements contained in the Corporation's 2004 Annual Report to shareholders. During 2004 approximately 61% of revenues were provided by fee income and approximately 39% of revenues were provided by net interest income. As a financial holding company, the Corporation coordinates the financial resources of the consolidated enterprise and maintains systems of financial, operational and administrative control intended to coordinate selected policies and activities, including as described in Item 9A of Part II hereto. The Bank is a national banking association with principal offices in Memphis, Tennessee. It received its charter in 1864. During 2004 through its various business lines, including consolidated subsidiaries, the Bank generated gross revenue (net interest income plus noninterest income) of approximately $2.2 billion and contributed substantially all of consolidated net income from continuing operations. At December 31, 2004, the Bank had $29.5 billion in total assets, $19.8 billion in total deposits, and $16.3 billion in total net loans. Among Tennessee headquartered banks, the Bank ranked 1st in Tennessee deposit market share at June 30, 2004. On December 31, 2004, the Bank had 496 banking locations (187 financial centers and 309 off-premises ATMs) in 18 Tennessee counties, including all of the major metropolitan areas of the state, 13 banking locations (7 financial centers and 6 off-premises ATMs) in Mississippi, one off premises ATM in Arkansas, and 7 financial centers in Virginia. At December 31, 2004, First Horizon Home Loan Corporation, a subsidiary of the Bank with principal offices in the Dallas, Texas metropolitan area, and its affiliates provided mortgage banking services through 357 offices, including satellite branches, in 44 states and, at September 30, 2004, ranked in the top 20 nationally in retail mortgage loan originations and top 15 nationally in mortgage loan servicing, as reported by Inside Mortgage Finance. FTN Financial products and services, at December 31, 2004, were offered through 14 offices in 11 states, and FTN Financial Capital Markets, a division of the Bank, ranked as one of the leading underwriters of U.S. agency debt. 1 The Corporation provides the following services through its subsidiaries: o general banking services for consumers, businesses, financial institutions, and governments o mortgage banking services o through FTN Financial-sales and underwriting of bank-eligible securities and securities eligible for underwriting by financial subsidiaries, mortgage loans and advisory services, and equity research o transaction processing - credit card merchant processing, nationwide check clearing services, and remittance processing o trust, fiduciary, and agency services o credit card products o discount brokerage and full-service brokerage o venture capital o equipment finance o investment and financial advisory services, including investment advisor to First Funds, a proprietary family of mutual funds o mutual fund sales as agent o retail and commercial insurance sales as agent o private mortgage reinsurance o consumer lending An element of the Corporation's business strategy is to seek acquisitions and consider divestitures that would enhance long-term shareholder value. The Corporation has a department charged with this responsibility which is constantly reviewing and developing opportunities to achieve this element of the Corporation's strategy. Acquisitions and divestitures which closed during the past three years are described in Note 2 to the Consolidated Financial Statements. All of the Corporation's subsidiaries are listed in Exhibit 21. The Bank has filed notice with the Comptroller of the Currency ("Comptroller") as a government securities broker/dealer. The FTN Financial Capital Markets division of the Bank is registered with the Securities and Exchange Commission ("SEC") as a municipal securities dealer. The Bank is supervised and regulated as described below. Highland Capital Management Corp., Martin and Company, Inc., First Tennessee Advisory Services, a separately identifiable department of the Bank, and First Tennessee Brokerage, Inc. are registered with the SEC as investment advisers. Hickory Venture Capital Corporation is licensed as a Small Business Investment Company. First Tennessee Brokerage, Inc., FTN Financial Securities Corporation and FTN Midwest Securities Corporation are registered as broker-dealers with the SEC and all states where they conduct business for which registration is required. First Horizon Home Loan Corporation is licensed as a mortgage lender (or exempt from licensing) in all states where it does business and is regulated by the Comptroller. First Tennessee Insurance Services, Inc. ("FTIS") and First Horizon Insurance Services, Inc. ("FHIS") are licensed as insurance agencies in all states where they do business for which licensing is required. FT Reinsurance Company is licensed by the state of South Carolina as a monoline insurance company. FT Insurance Corporation is licensed as an insurance agency in Alabama. Synaxis Group, Inc.'s subsidiaries, which include Polk & Sullivan Group, Inc., Synaxis Risk Services, Inc., Merritt & McKenzie, Inc., and Van Meter Insurance, Inc., are licensed as insurance agencies in all states where they do business for which licensing is required. FTN Financial Securities Corporation, FTN Midwest Securities Corporation, FHIS, and FTIS and all of the subsidiaries listed in the preceding sentence are financial subsidiaries under the Gramm-Leach-Bliley Act. First Tennessee 2 Brokerage, Inc. is licensed as an insurance agency in the states where it does business for which licensing is required for the sale of annuity products. Expenditures for research and development activities were not material in any of the last three fiscal years. Neither the Corporation nor any of its significant subsidiaries is dependent upon a single customer or very few customers. At December 31, 2004, the Corporation and its subsidiaries had 12,825 employees and 12,470 full-time-equivalent employees, not including contract labor for certain services. For additional information on the business of the Corporation, refer to the Management's Discussion and Analysis and Glossary sections contained in pages 3 through 52 of the Corporation's 2004 Annual Report to shareholders, which sections are incorporated herein by reference. The Corporation's current internet address is www.firsthorizon.com. The Corporation plans to launch a new corporate website in the first quarter of 2005 at www.fhnc.com. The Corporation makes available free of charge on its Internet website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments thereto as soon as reasonably practicable after the Corporation files such material with, or furnishes such material to, the Securities and Exchange Commission, as applicable. Corporate Governance and NYSE Disclosures. The Corporation's Board of Directors has adopted Corporate Governance Guidelines, along with a Code of Business Conduct and Ethics, a Code of Ethics for Senior Financial Officers, and the charters of the Board's Audit Committee, Nominating and Corporate Governance Committee, and Compensation (previously named Human Resources) Committee. All of those documents are available on the Corporation's website. To access the information at the current website address (www.firsthorizon.com), click on "About Us," then "Investor Relations," and then "Corporate Governance." The information is expected to be accessible in the "Investor Relations" area of the Corporation's planned new corporate website (www.fhnc.com). Paper copies of any of those documents are available to shareholders upon request to the Corporate Secretary. The Corporation's Code of Business Conduct and Ethics includes a number of policies and guidelines that have been in place over the years. Any waiver of this Code for an executive officer or director will be promptly disclosed to shareholders by posting such information on the Corporation's website. See Item 10 of Part III below for additional information concerning the Corporation's Code of Ethics for Senior Financial Officers. The Corporation's Chief Executive Officer is required to certify annually to the New York Stock Exchange ("NYSE") that the Chief Executive Officer is unaware of any violation by the Corporation of NYSE corporate governance listing standards, and this certification will be disclosed annually (commencing in 2005) in the Corporation's annual report to shareholders or by another method authorized by the NYSE. 3 Supervision and Regulation. The following summary sets forth certain of the material elements of the regulatory framework applicable to bank holding companies and financial holding companies and their subsidiaries and to companies engaged in securities and insurance activities and provides certain specific information about the Corporation. The bank regulatory framework is intended primarily for the protection of depositors and the Federal Deposit Insurance Funds and not for the protection of security holders. In addition, certain activities of the Corporation and its subsidiaries are subject to various securities and insurance laws and are regulated by the Securities and Exchange Commission and the state insurance departments of the states in which they operate. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by express reference to each of the particular statutory and regulatory provisions. A change in applicable statutes, regulations or regulatory policy may have a material effect on the business of the Corporation. General The Corporation is a bank holding company and financial holding company within the meaning of the Bank Holding Company Act of 1956, as amended (the "BHCA") and is registered with the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Corporation is subject to the regulation and supervision of and examination by the Federal Reserve under the BHCA. The Corporation is required to file with the Federal Reserve annual reports and such additional information as the Federal Reserve may require pursuant to the BHCA. Under the BHCA, prior to March 13, 2000, bank holding companies could not in general directly or indirectly acquire the ownership or control of more than 5% of the voting shares or substantially all of the assets of any company, including a bank, without the prior approval of the Federal Reserve, and a bank holding company and its subsidiaries were generally limited to engaging in banking and activities found by the Federal Reserve to be so closely related to banking as to be a proper incident thereto. Since March 13, 2000, eligible bank holding companies that elect to become financial holding companies may affiliate with securities firms and insurance companies and engage in activities that are "financial in nature" generally without the prior approval of the Federal Reserve. See "Gramm-Leach-Bliley Act" below. In addition, the BHCA permits the Federal Reserve to approve an application by a bank holding company to acquire a bank located outside the acquirer's principal state of operations without regard to whether the transaction is prohibited under state law. See "Interstate Banking and Branching Legislation." The Tennessee Bank Structure Act of 1974, among other things, prohibits (subject to certain exceptions) a bank holding company from acquiring a bank for which the home state is Tennessee (a "Tennessee bank") if, upon consummation, the company would directly or indirectly control 30% or more of the total deposits in insured depository institutions in Tennessee. As of June 30, 2004, the Corporation estimates that it held approximately 17% of such deposits. Subject to certain exceptions, the Tennessee Bank Structure Act prohibits a bank holding company from acquiring a bank in Tennessee which has been in operation for less than five years. Tennessee law permits a Tennessee bank to establish branches in any county in Tennessee. See also "- Interstate Banking and Branching Legislation" below. The Bank is a national banking association subject to regulation, examination and supervision by the Comptroller as its primary federal regulator. In addition, the Bank is insured by, and subject to regulation by, the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is also subject to various requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon and limitations on the types of investments that may be made, 4 activities that may be engaged in, and types of services that may be offered. Various consumer laws and regulations also affect the operations of the Bank. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve as it attempts to control the money supply and credit availability in order to influence the economy. Payment of Dividends The Corporation is a legal entity separate and distinct from its banking and other subsidiaries. The principal source of cash flow of the Corporation, including cash flow to pay dividends on its stock or principal (premium, if any) and interest on debt securities, is dividends from the Bank. There are statutory and regulatory limitations on the payment of dividends by the Bank to the Corporation, as well as by the Corporation to its shareholders. As a national bank, the Bank is required by federal law to obtain the prior approval of the Comptroller for the payment of dividends if the total of all dividends declared by the board of directors of the Bank in any year will exceed the total of (i) its net profits (as defined and interpreted by regulation) for that year plus (ii) the retained net profits (as defined and interpreted by regulation) for the preceding two years, less any required transfers to surplus. A national bank also can pay dividends only to the extent that retained net profits (including the portion transferred to surplus) exceed bad debts (as defined by regulation). If, in the opinion of the applicable federal bank regulatory authority, a depository institution or a holding company is engaged in or is about to engage in an unsafe or unsound practice (which, depending on the financial condition of the depository institution or holding company, could include the payment of dividends), such authority may require that such institution or holding company cease and desist from such practice. The federal banking agencies have indicated that paying dividends that deplete a depository institution's or holding company's capital base to an inadequate level would be such an unsafe and unsound banking practice. Moreover, the Federal Reserve, the Comptroller and the FDIC have issued policy statements which provide that bank holding companies and insured depository institutions generally should only pay dividends out of current operating earnings. In addition, under the Federal Deposit Insurance Act ("FDIA"), an FDIC-insured depository institution may not make any capital distributions (including the payment of dividends) or pay any management fees to its holding company or pay any dividend if it is undercapitalized or if such payment would cause it to become undercapitalized. At December 31, 2004, under dividend restrictions imposed under applicable federal laws, the Bank, without obtaining regulatory approval, could legally declare aggregate dividends of approximately $807.6 million. Under Tennessee law, the Corporation is not permitted to pay dividends if, after giving effect to such payment, it would not be able to pay its debts as they become due in the usual course of business or the Corporation's total assets would be less than the sum of its total liabilities plus any amounts needed to satisfy any preferential rights if the Corporation was dissolving. The payment of dividends by the Corporation and the Bank may also be affected or limited by other factors, such as the requirement to maintain adequate capital above regulatory guidelines and debt covenants. 5 Transactions with Affiliates There are various legal restrictions on the extent to which the Corporation and its nonbank subsidiaries (including for purposes of this paragraph, in certain situations, subsidiaries of the Bank) can borrow or otherwise obtain credit from the Bank. There are also legal restrictions on the Bank's purchases of or investments in the securities of and purchases of assets from the Corporation and its nonbank subsidiaries, the Bank's loans or extensions of credit to third parties collateralized by the securities or obligations of the Corporation and its nonbank subsidiaries, the issuance of guaranties, acceptances and letters of credit on behalf of the Corporation and its nonbank subsidiaries, and certain bank transactions with the Corporation and its nonbank subsidiaries, or with respect to which the Corporation and its nonbank subsidiaries act as agent, participate or have a financial interest. Subject to certain limited exceptions, the Bank (including for purposes of this paragraph all subsidiaries of the Bank) may not extend credit to the Corporation or to any other affiliate (other than another subsidiary bank and certain exempted affiliates) in an amount which exceeds 10% of the Bank's capital stock and surplus and may not extend credit in the aggregate to all such affiliates in an amount which exceeds 20% of its capital stock and surplus. Further, there are legal requirements as to the type, amount and quality of collateral which must secure such extensions of credit by the Bank to the Corporation or to such other affiliates. Also, extensions of credit and other transactions between the Bank and the Corporation or such other affiliates must be on terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the Bank as those prevailing at the time for comparable transactions with non-affiliated companies. Also, the Bank and certain of its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property, or furnishing of services. Capital Adequacy The Federal Reserve has adopted risk-based capital guidelines for bank holding companies. The minimum guideline for the ratio of total capital ("Total Capital") to risk-weighted assets (including certain off-balance-sheet items, such as standby letters of credit) is 8%, and the minimum ratio of Tier 1 Capital (defined below) to risk-weighted assets is 4%. At least half of the Total Capital must be composed of common stock, minority interests in the equity accounts of consolidated subsidiaries, noncumulative perpetual preferred stock and a limited amount of cumulative perpetual preferred stock, less goodwill and certain other intangible assets ("Tier 1 Capital"). The remainder may consist of qualifying subordinated debt, certain types of mandatory convertible securities and perpetual debt, other preferred stock and a limited amount of loan loss reserves. At December 31, 2004, the Corporation's consolidated Tier 1 Capital and Total Capital ratios were 8.62% and 13.18%, respectively. The Federal Reserve Board, the FDIC and the OCC have adopted rules to incorporate market and interest-rate risk components into their risk-based capital standards and that explicitly identify concentration of credit risk and certain risks arising from non-traditional activities, and the management of such risks, as important factors to consider in assessing an institution's overall capital adequacy. Under the market risk requirements, capital is allocated to support the amount of market risk related to a financial institution's ongoing trading activities for banks with relatively large trading activities. Institutions will be able to satisfy this additional requirement, in part, by issuing short-term subordinated debt that qualifies as Tier 3 capital. Based on present practices and activity levels, those trading related market risk rules have no significant impact on the Corporation's regulatory capital requirements. In addition, the Federal Reserve has established minimum leverage ratio guidelines for bank holding companies. These guidelines provide for a minimum ratio of Tier 1 Capital to quarterly average assets, less goodwill and certain other intangible assets (the "Leverage Ratio"), of 3% for bank holding companies that meet certain specific criteria, including having the highest regulatory rating. All other 6 bank holding companies generally are required to maintain a Leverage Ratio of at least 3%, plus an additional cushion of 100 to 200 basis points. The Corporation's Leverage Ratio at December 31, 2004 was 7.16%. The guidelines also provide that bank holding companies experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Furthermore, the Federal Reserve has indicated that it will consider a "tangible Tier 1 Capital leverage ratio" (deducting all intangibles) and other indicia of capital strength in evaluating proposals for expansion or new activities. The Bank is subject to risk-based and leverage capital requirements similar to those described above adopted by the Comptroller. The Corporation believes that the Bank was in compliance with applicable minimum capital requirements as of December 31, 2004. Neither the Corporation nor the Bank has been advised by any federal banking agency of any specific minimum Leverage Ratio requirement applicable to it. Failure to meet capital guidelines could subject a bank to a variety of enforcement remedies, including the termination of deposit insurance by the FDIC, and to certain restrictions on its business and in certain circumstances to the appointment of a conservator or receiver. See "--Prompt Corrective Action." In June 1999, the Basel Committee on Banking Supervision launched its efforts to develop an improved capital adequacy framework by issuing its proposals to revise the 1988 Capital Accord. The new capital framework would consist of minimum capital requirements, a supervisory review process and the effective use of market discipline. In its proposal for minimum capital requirements, the Committee set out options from which banks could choose depending on the complexity of their business and the quality of their risk management. A standardized approach would refine the current measurement framework and introduce the use of external credit assessments to determine a bank's capital charge. Banks with more advanced risk management capabilities could make use of an internal risk-rating based approach. Under this approach, some of the key elements of credit risk, such as the probability of default of the borrower, would be estimated internally by a bank. The Committee also proposes an explicit capital charge for operational risk to provide for problems like internal systems failure. The supervisory review aspect of the new framework would seek to ensure that a bank's capital position is consistent with its overall risk profile and strategy. The supervisory review process would also encourage early supervisory intervention when a bank's capital position deteriorates. The third aspect of the new framework, market discipline, would call for detailed disclosure of a bank's capital adequacy in order to encourage high disclosure standards and to enhance the role of market participants in encouraging banks to hold adequate capital. Banks would also be required to disclose how they evaluate their own capital adequacy. In June, 2004, the Basel Committee issued its final framework. The U.S. Regulators are expected to issue a Notice of Proposed Rulemaking in 2005. That Notice is expected to require implementation of the advanced measurement methods for large internationally active banks (core banks) and allows for other banks to opt-in should they so choose. Under the proposed rules the Corporation would not be considered a core bank that would be required to implement the new rules but could evaluate whether to opt in. For those banks that do not opt in, the current capital rules are expected to continue to apply. A final U.S. rule is expected in 2006 with implementation expected in 2008. The Corporation cannot predict at this time the final form the U.S. Regulators' rules will take, or the effect they would have on the financial condition or results of operations of the Bank or the Corporation. The Corporation intends to continue to monitor the evolution of the proposed rulemaking and its potential impacts to the Corporation and the industry. 7 Holding Company Structure and Support of Subsidiary Banks Because the Corporation is a holding company, its right to participate in the assets of any subsidiary upon the latter's liquidation or reorganization will be subject to the prior claims of the subsidiary's creditors (including depositors in the case of the Bank) except to the extent that the Corporation may itself be a creditor with recognized claims against the subsidiary. In addition, depositors of a bank, and the FDIC as their subrogee, would be entitled to priority over the creditors in the event of liquidation of a bank subsidiary. Under Federal Reserve policy, the Corporation is expected to act as a source of financial strength to, and to commit resources to support, the Bank. This support may be required at times when, absent such Federal Reserve policy, the Corporation may not be inclined to provide it. In addition, any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. In the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. Cross-Guarantee Liability Under the FDIA, a depository institution insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to any commonly controlled FDIC-insured depository institution "in danger of default." "Default" is defined generally as the appointment of a conservator or receiver and "in danger of default" is defined generally as the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance. The FDIC's claim for damages is superior to claims of shareholders of the insured depository institution or its holding company but is subordinate to claims of depositors, secured creditors and holders of subordinated debt (other than affiliates) of the commonly controlled insured depository institution. The Bank is currently the only depository institution owned by the Corporation. In the event that the Corporation established or acquired another depository institution, any loss suffered by the FDIC in respect of one subsidiary bank would likely result in assertion of the cross-guarantee provisions, the assessment of such estimated losses against the Corporation's other subsidiary bank(s), and a potential loss of the Corporation's investment in such subsidiary bank. Prompt Corrective Action The FDIA requires, among other things, the federal banking regulators to take "prompt corrective action" in respect of FDIC-insured depository institutions that do not meet minimum capital requirements. Under the FDIA, insured depository institutions are divided into five capital tiers: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically undercapitalized." Under applicable regulations, an institution is defined to be well capitalized if it maintains a Leverage Ratio of at least 5%, a Tier 1 Capital ratio of at least 6% and a Total Capital ratio of at least 10% and is not subject to a directive, order or written agreement to meet and maintain specific capital levels. An institution is defined to be adequately capitalized if it meets all of its minimum capital requirements as described above. An institution will be considered undercapitalized if it fails to meet any minimum required measure, significantly undercapitalized if it has a Total Risk-Based Capital ratio of less than 6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a Leverage Ratio of less than 3% and critically undercapitalized if it fails to maintain a level of tangible equity equal to at least 2% of total assets. An institution may be deemed to be in a capitalization category that is lower than is indicated by its actual capital position if it receives an unsatisfactory examination rating. 8 The FDIA generally prohibits an FDIC-insured depository institution from making any capital distribution (including payment of dividends) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions are subject to growth limitations and are required to submit capital restoration plans. An insured depository institution's holding company must guarantee the capital plan, up to an amount equal to the lesser of 5% of the depository institution's assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan, for the plan to be accepted by the applicable federal regulatory authority. The federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution's capital. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets and cessation of receipt of deposits from correspondent banks. Critically undercapitalized depository institutions are subject to appointment of a receiver or conservator, generally within 90 days of the date on which they become critically undercapitalized. The Corporation believes that at December 31, 2004 the Bank had sufficient capital to qualify as "well capitalized" under the regulatory capital requirements discussed above. Interstate Banking and Branching Legislation The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "IBBEA") authorizes interstate acquisitions of banks and bank holding companies without geographic limitation. In addition, a bank may merge with a bank in another state as long as neither of the states has opted out of interstate branching prior to May 31, 1997. Tennessee did not opt out of interstate branching. A bank may establish and operate a de novo branch in a state in which the bank does not maintain a branch if that state explicitly permits de novo branching. Tennessee permits de novo branching on a reciprocity basis. Once a bank has established branches in a state through an interstate merger transaction, the bank may establish and acquire additional branches at any location in the state where any bank involved in the interstate merger transaction could have established or acquired branches under applicable federal or state law. A bank that has established a branch in a state through de novo branching may establish and acquire additional branches in such state in the same manner and to the same extent as a bank having a branch in such state as a result of an interstate merger. If a state opts out of interstate branching within the specified time period, no bank in any other state may establish a branch in the opting out of state, whether through an acquisition or de novo. Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act repealed or modified a number of significant provisions of then-current laws, including the Glass-Steagall Act and the Bank Holding Company Act of 1956, which imposed restrictions on banking organizations' ability to engage in certain types of activities. The Act generally allows bank holding companies such as the Corporation broad authority to engage in activities that are financial in nature or incidental to such a financial activity, including insurance underwriting and brokerage; merchant banking; securities underwriting, dealing and market-making; real estate development; and such additional activities as the Federal Reserve in consultation with the Secretary of the Treasury determines to be financial in nature or incidental thereto. A bank holding company may engage in these activities directly or through subsidiaries by qualifying as a "financial holding company." 9 To qualify a bank holding company must file a declaration with the Federal Reserve and certify that all of its subsidiary depository institutions are well-managed and well-capitalized. The Act also permits national banks such as the Bank to engage in certain of these activities through financial subsidiaries. To control or hold an interest in a financial subsidiary, a national bank must meet the following requirements: (1) the national bank must receive approval from the Comptroller for the financial subsidiary to engage in the activities, (2) the national bank and its depository institution affiliates must each be well-capitalized and well-managed, (3) the aggregate consolidated total assets of all of the national bank's financial subsidiaries must not exceed 45% of the national bank's consolidated total assets or, if less, $50 billion, (4) the national bank must have in place adequate policies and procedures to identify and manage financial and operational risks and to preserve the separate identities and limited liability of the national bank and the financial subsidiary, and (5) if the financial subsidiary will engage in principal transactions and the national bank is one of the one hundred largest banks, the national bank must have outstanding at least one issue of unsecured long-term debt that is currently rated in one of the three highest investment grade rating categories (or if in the second fifty largest banks, an alternative requirement is that the national bank has a current long-term issuer credit rating within the three highest investment grade rating categories). No new financial activity may be commenced under the Act unless the national bank and all of its depository institution affiliates have at least "satisfactory" CRA ratings. Certain restrictions apply if the bank holding company or the national bank fails to continue to meet one or more of the requirements listed above. In addition, the Act contains a number of other provisions that may affect the Bank's operations, including functional regulation of the Bank's securities and investment management operations by the SEC and the Bank's insurance operations by the States and limitations on the use and disclosure to third parties of customer information. The Act generally became effective March 11, 2000, although certain provisions took effect later, such as functional regulation (May 12, 2001, except for certain matters), and compliance with privacy regulations was required by July 1, 2001. The Corporation is a financial holding company and currently, the Bank has 9 financial subsidiaries. The Corporation cannot predict at this time the potential effect that the Act will have on its business and operations, although the Corporation expects that the general effect of the Act will be to increase competition in the financial services industry generally. FDIC Insurance Assessments; DIFA The FDIC insurance premium charged on bank deposits insured by the Bank Insurance Fund ("BIF") and on deposits insured by the Savings Association Insurance Fund ("SAIF"), including savings association deposits acquired by banks, ranges from 0 to 27 cents per $100 of deposits, depending on the institution's risk classification, based on capital and supervisory risk factors. The Deposit Insurance Funds Act of 1996 ("DIFA") provides for assessments to be imposed on insured depository institutions with respect to deposits insured by the BIF (in addition to any assessments imposed on depository institutions with respect to SAIF-insured deposits) to pay for the cost of Financing Corporation ("FICO") bonds. All banks are assessed to pay the interest due on FICO bonds. The cost to the Corporation on an annual basis is immaterial. Under the FDIA, insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by a federal bank regulatory agency. Depositor Preference Federal law provides that deposits and certain claims for administrative expenses and employee compensation against an insured depository institution would be afforded a priority over other general 10 unsecured claims against such an institution, including federal funds and letters of credit, in the "liquidation or other resolution" of such an institution by any receiver. Securities Regulation Certain of the Corporation's subsidiaries are subject to various securities laws and regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the jurisdictions in which they operate. The Corporation's registered broker-dealer subsidiaries are subject to the SEC's net capital rule, Rule 15c3-1. That rule requires the maintenance of minimum net capital and limits the ability of the broker-dealer to transfer large amounts of capital to a parent company or affiliate. Compliance with the rule could limit operations that require intensive use of capital, such as underwriting and trading. Certain of the Corporation's subsidiaries and a division of the Bank are registered investment advisers who are regulated under the Investment Advisers Act of 1940. Among other activities, certain of these investment advisers provide investment advice to investment companies regulated under the Investment Company Act of 1940. Advisory contracts with these investment companies automatically terminate under these laws upon an assignment of the contract by the investment adviser unless appropriate consents are obtained. Subsidiaries of the Corporation are subject to certain restrictions in their dealings with investment companies advised by these affiliated investment advisers. Insurance Activities Subsidiaries of the Corporation sell various types of insurance as agent in a number of the states. Insurance activities are subject to regulation by the states in which such business is transacted. Although most of such regulation focuses on insurance companies and their insurance products, insurance agents and their activities are also subject to regulation by the states, including, among other things, licensing and marketing and sales practices. Competition. The Corporation and its subsidiaries face substantial competition in all aspects of the businesses in which they engage from national and state banks located in Tennessee and large out-of-state banks as well as from savings and loan associations, credit unions, other financial institutions, consumer finance companies, trust companies, investment counseling firms, money market mutual funds, insurance companies, securities firms, mortgage banking companies and others. For certain information on the competitive position of the Corporation and the Bank, refer to the "General" subsection above of this Item 1. Also, refer to the subsections entitled "Supervision and Regulation" and "Effect of Governmental Policies," both of which are relevant to an analysis of the Corporation's competitors. Due to the intense competition in the financial industry, the Corporation makes no representation that its competitive position has remained constant, nor can it predict whether its position will change in the future. Sources and Availability of Funds. Specific reference is made to the Management's Discussion and Analysis and Glossary sections, including the subsections entitled "Deposits and Other Sources of Funds," and "Liquidity Risk Management," contained in pages 20 through 21 and pages 28 through 30 of the Corporation's 2004 Annual Report to shareholders, which sections are incorporated herein by reference. 11 Effect of Governmental Policies. The Bank is affected by the policies of regulatory authorities, including the Federal Reserve System and the Comptroller. An important function of the Federal Reserve System is to regulate the national money supply. Among the instruments of monetary policy used by the Federal Reserve are: purchases and sales of U.S. Government securities in the marketplace; changes in the discount rate, which is the rate any depository institution must pay to borrow from the Federal Reserve; and changes in the reserve requirements of depository institutions. These instruments are effective in influencing economic and monetary growth, interest rate levels and inflation. The monetary policies of the Federal Reserve System and other governmental policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. Because of changing conditions in the national economy and in the money market, as well as the result of actions by monetary and fiscal authorities, it is not possible to predict with certainty future changes in interest rates, deposit levels, loan demand or the business and earnings of the Corporation and the Bank or whether the changing economic conditions will have a positive or negative effect on operations and earnings. Various bills are from the time to time introduced in the United States Congress and the Tennessee General Assembly and other state legislatures, and regulations are proposed by the regulatory agencies which could affect the business of the Corporation and its subsidiaries. It cannot be predicted whether or in what form any of these proposals will be adopted or the extent to which the business of the Corporation and its subsidiaries may be affected thereby. Statistical Information Required by Guide 3. The statistical information required to be displayed under Item I pursuant to Guide 3, "Statistical Disclosure by Bank Holding Companies," of the Exchange Act Industry Guides is incorporated herein by reference to the Consolidated Financial Statements and the notes thereto and the Management's Discussion and Analysis and Glossary sections set forth at pages 3 through 52 of the Corporation's 2004 Annual Report to shareholders. Certain information not contained in the 2004 Annual Report to shareholders, but required by Guide 3, is contained in the tables immediately following: 12 FIRST HORIZON NATIONAL CORPORATION ADDITIONAL GUIDE 3 STATISTICAL INFORMATION ON DECEMBER 31 (Unaudited) Investment Portfolio (Dollars in thousands) 2004 2003 2002 - ------------------------------------------------------------------------------------ Mortgage-backed securities & collateralized mortgage obligations $ 2,391,162 $ 2,200,862 $ 2,396,530 U.S. Treasury 41,244 47,977 57,367 U.S. government agencies 40,959 1,164 27,208 States and political subdivisions 8,268 14,423 28,890 Other 199,364 205,944 190,290 -------------- ------------- -------------- Total $ 2,680,997 $ 2,470,370 $ 2,700,285 -------------- ------------- -------------- -------------- ------------- -------------- Loan Portfolio (Dollars in thousands) 2004 2003 2002 2001 2000 - ---------------------------------------------------------------------------------------------------------------- Commercial: Commercial, financial and industrial $ 5,560,736 $ 4,502,917 $ 4,134,158 $ 4,176,738 $ 3,964,396 Real estate commercial 960,178 968,064 1,037,341 929,036 946,903 Real estate construction 1,208,703 690,402 551,449 492,531 415,713 Retail: Real estate residential 7,244,716 6,817,122 4,721,307 3,732,767 3,573,260 Real estate construction 1,035,562 527,260 342,127 211,429 179,515 Other retail 168,806 212,362 286,069 459,510 840,228 Credit card receivables 248,972 272,398 272,994 281,132 319,435 ------------- ------------- ------------- ------------- ------------- Total $ 16,427,673 $ 13,990,525 $ 11,345,445 $ 10,283,143 $ 10,239,450 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Short-Term Borrowings (Dollars in thousands) 2004 2003 2002 - ---------------------------------------------------------------------------- Federal funds purchased and securities sold under agreements to repurchase $ 3,247,048 $ 3,079,248 $ 3,126,350 Commercial paper 23,712 31,793 25,695 Other short-term borrowings 482,044 196,183 335,513 ------------- ------------- ------------- Total $ 3,752,804 $ 3,307,224 $ 3,487,558 ------------- ------------- ------------- ------------- ------------- ------------- 13 Maturities of Short-Term Purchased Funds on December 31, 2004 0-3 3-6 6-12 Over 12 (Dollars in thousands) Months Months Months Months Total - ----------------------------------------------------------------------------------------------------------- Certificates of deposit $100,000 and more $ 6,518,095 $ 319,171 $ 555,510 $ 823,400 $ 8,216,176 Federal funds purchased and securities sold under agreements to repurchase 3,247,048 -- -- -- 3,247,048 Commercial paper and other short-term borrowings 495,756 -- -- 10,000 505,756 - ----------------------------------------------------------------------------------------------------------- Total $ 10,260,899 $ 319,171 $ 555,510 $ 833,400 $ 11,968,980 - ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- Contractual Maturities of Commercial & Real Estate Construction Loans on December 31, 2004 After 1 Year (Dollars in thousands) Within 1 year Within 5 Years After 5 Years Total - ----------------------------------------------------------------------------------------------------------- Commercial, financial and industrial $3,274,160 $2,072,353 $214,223 $5,560,736 Real estate commercial 361,937 488,718 109,523 960,178 Commercial real estate construction 809,100 367,291 32,312 1,208,703 Retail real estate construction 1,025,755 9,807 -- 1,035,562 - ----------------------------------------------------------------------------------------------------------- Total $5,470,952 $2,938,169 $356,058 $8,765,179 - ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- For maturities over one year: Interest rates - floating $1,739,705 $140,683 $1,880,388 Interest rates - fixed 1,198,464 215,375 1,413,839 - ------------------------------------------------------------------------------------------------------------ Total $2,938,169 $356,058 $3,294,227 - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ ITEM 2 PROPERTIES The Corporation has no properties that it considers materially important to its financial statements. ITEM 3 LEGAL PROCEEDINGS The Corporation is a party to no material pending legal proceedings the nature of which are required to be disclosed pursuant to the Instructions contained in the Form of this Report. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted during the fourth quarter of 2004 to a vote of security holders, through the solicitation of proxies or otherwise. 14 ITEM 4A EXECUTIVE OFFICERS OF REGISTRANT The following is a list of executive officers of the Corporation as of March 1, 2005. The executive officers are elected at the April meeting of the Corporation's Board of Directors following the annual meeting of shareholders for a term of one year and until their successors are elected and qualified. Name and Age Offices and Positions (Year First Elected to Office) - ------------ ---------------------------------------------------- Gerald L. Baker President - First Horizon Financial Services and Executive Vice Age: 61 President of the Corporation and the Bank (2004) Charles G. Burkett President - First Tennessee Financial Services and Executive Age: 53 Vice President of the Corporation and the Bank (2004) J. Kenneth Glass Chairman of the Board (1/1/04), President (2001) and Chief Age: 58 Executive Officer (2002) of the Corporation and the Bank John H. Hamilton Executive Vice President - Bank Services Group (2004) Age: 55 Herbert H. Hilliard Executive Vice President, Risk Management (2001) and Government Relations and Age: 57 CRA (1988) of the Corporation and the Bank Jim L. Hughes President - FTN Financial and Executive Vice President of the Corporation Age: 63 (2004) and President - FTN Financial of the Bank (1999) Harry A. Johnson, III Executive Vice President (1990) and General Counsel (1988) of the Corporation Age: 56 and the Bank James F. Keen Executive Vice President (2003), Corporate Controller of the Corporation (1988) Age: 54 and the Bank (2001) and principal accounting officer Larry B. Martin Chief Operating Officer - First Tennessee Financial Services of the Corporation Age: 57 and the Bank (2004) Marlin L. Mosby, III Executive Vice President (2002) and Chief Financial Officer (2003) of the Age: 41 Corporation and the Bank Sarah L. Meyerrose Executive Vice President, Corporate (2002) and Employee Services (1998) of the Age: 49 Corporation and the Bank John P. O'Connor, Jr. Executive Vice President of the Corporation (1990) and the Bank (1987) and Age: 61 Chief Credit Officer (1988) Elbert L. Thomas, Jr. Executive Vice President (1995) and Interest Rate Risk Manager (2003) of the Age: 56 Corporation and the Bank Each of the executive officers has been employed by the Corporation or its subsidiaries during each of the last five years. Mr. Baker also is President and Chief Executive Officer of First Horizon Home Loan Corporation. Prior to April 2004, Mr. Burkett was President - Retail Financial Services/Memphis Financial Services, and prior to July of 2001, he was Executive Vice President, Manager Affluent Market of the Bank. Prior to July of 2002, Mr. Glass was President and Chief Operating Officer of the Corporation and the Bank, and prior to July 2001, he was President-Retail Financial Services of the Corporation and the Bank. Prior to April of 2000, Mr. Glass was Executive Vice President of the Corporation and prior to April of 1999, he was President-Tennessee Banking Group of the Bank. 15 Prior to April 2004, Mr. Hamilton was Executive Vice President - Product Management and Delivery Services. Prior to June 2002, Mr. Hamilton was Executive Vice President, Manager Bank Services Group and prior to April 2002, he was Executive Vice President-Corporate Financial Services. Prior to April 2004, Mr. Martin was President - Business Financial Services/Tennessee Financial Services, and prior to July of 2001, he was Chairman and CEO - Knoxville of the Bank. From July 2001 to July 2002, Ms. Meyerrose was also Executive Vice President, Wealth Management. Prior to November 2003, Mr. Mosby was Executive Vice President-Strategic Planning and Investor Relations and prior to April 2002, he was Senior Vice President, Strategic Planning. Mr. Thomas was appointed Executive Vice President-Interest Rate Risk Manager in October 2003 following his return after a disability leave which commenced December 1, 2002. Prior to December 1, 2002, Mr. Thomas was Chief Financial Officer of the Company and the Bank. Mr. Keen was appointed Chief Financial Officer on an interim basis, from December 1, 2002 until November 17, 2003. PART II ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Market for the Corporation's Common Stock: The Corporation's common stock, $0.625 par value, is listed and trades on the New York Stock Exchange, Inc. under the symbol FHN. As of December 31, 2004, there were 8,313 shareholders of record of the Corporation's common stock. Additional information called for by this Item is incorporated herein by reference to the Summary of Quarterly Financial Information Table (Table 25), the Selected Financial and Operating Data Table, and the "Deposits and Other Sources of Funds" and "Liquidity Risk Management" subsections of the Management's Discussion and Analysis section contained in the Corporation's 2004 Annual Report to shareholders, Note 18 to the Consolidated Financial Statements contained in the 2004 Annual Report, and to the "Payment of Dividends" and "Transactions with Affiliates" subsections contained in Item 1 of Part I of this Form 10-K, which are incorporated herein by reference. (b) Sale of Unregistered Securities: During 2004 the Corporation sold no equity securities without registration under the Securities Act of 1933, as amended. (c) Issuer Repurchases: Repurchases are made in the open market or through privately negotiated transactions and are subject to market conditions, accumulation of excess equity and prudent capital management. Pursuant to previously granted Board authority, the Corporation may repurchase shares from time to time for its stock option and other compensation plans and will evaluate the level of capital and take action designed to generate or use capital as appropriate for the interests of the shareholders. Additional information concerning repurchase activity during the final three months of 2004 is presented in Table 13, and the surrounding notes and other text, of the Management's Discussion and Analysis section appearing on pages 22-23 of the Corporation's 2004 Annual Report to shareholders, which information is incorporated herein by this reference. 16 ITEM 6 SELECTED FINANCIAL DATA The information called for by this Item is incorporated herein by reference to the Selected Financial and Operating Data table appearing on page 2 of the Corporation's 2004 Annual Report to shareholders. ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The information called for by this Item is incorporated herein by reference to the Management's Discussion and Analysis section, Glossary section, and the Consolidated Historical Statements of Income and Consolidated Average Balance Sheets and Related Yields and Rates tables appearing on pages 3-114 of the Corporation's 2004 Annual Report to shareholders. ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information called for by this Item is incorporated herein by reference to the "Interest Rate Risk Management" subsection of Note 1 to the Consolidated Financial Statements, and to the "Risk Management-Interest Rate Risk Management" subsection of the Management's Discussion and Analysis section, both of which appear, respectively, on page 66 and on pages 23-27 of the Corporation's 2004 Annual Report to shareholders. ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by this Item is incorporated herein by reference to the Consolidated Financial Statements and the notes thereto and to the Summary of Quarterly Financial Information table appearing, respectively, on pages 56-111 and on page 47 of the Corporation's 2004 Annual Report to shareholders. ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures. The Corporation's management, with the participation of the Corporation's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Corporation's disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by the annual report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Corporation's disclosure controls and procedures are effective to ensure that material information relating to the Corporation and the Corporation's consolidated subsidiaries is made known to such officers by others within these entities, particularly during the period this annual report was prepared, in order to allow timely decisions regarding required disclosure. 17 Management's Report on Internal Control over Financial Reporting. The report of management required by Item 308(a) of Regulation S-K, and the attestation report required by Item 308(b) of Regulation S-K, appear at pages 53-54 of the Corporation's 2004 Annual Report to shareholders and are incorporated herein by this reference. Changes in Internal Control over Financial Reporting. There have not been any changes in the Corporation's internal control over financial reporting during the Corporation's fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting. ITEM 9B OTHER INFORMATION There is no information required to have been disclosed in a report on Form 8-K during the fourth quarter of 2004 that has not been reported. PART III ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information called for by this Item as it relates to directors and nominees for director of the Corporation, audit committee financial expert, and members of the Audit Committee of the Corporation's Board of Directors is incorporated herein by reference to the "Corporate Governance and Board Matters" section and the "Election of Directors" section of the Corporation's 2005 Proxy Statement (excluding the Audit Committee Report and the statements regarding the independence of members of the Audit Committee). The information required by this Item as it relates to executive officers of the Corporation is incorporated herein by reference to Item 4A in Part I of this Report. The information required by this Item as it relates to compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the "Section 16(a) Beneficial Ownership Reporting Compliance" section of the 2005 Proxy Statement. The Corporation's Board of Directors has adopted a Code of Ethics for Senior Financial Officers that applies to the Chief Executive Officer, Chief Financial Officer and Controller and also applies to all professionals serving in the financial, accounting or audit areas of the Corporation and its subsidiaries. A copy of the Code has been filed as Exhibit 14 to this report and is posted on the Corporation's current internet website (www.firsthorizon.com). (Click on "About Us," then "Investor Relations," and then "Corporate Governance.") The Code is expected to be accessible in the "Investor Relations" area of the Corporation's planned new corporate website (www.fhnc.com). There have been no amendments to, or waivers from, provisions of the Code that apply to the Chief Executive Officer, Chief Financial Officer or Controller and that relate to elements of the Code identified in Item 406(b) of SEC Regulation S-K since the Code was adopted, and the Corporation intends to satisfy its disclosure obligations under Item 5.05 of Form 8-K related thereto by posting such information on the Corporation's Internet website, the address for which is listed above. 18 ITEM 11 EXECUTIVE COMPENSATION The information called for by this Item is incorporated herein by reference to the following sections of the Corporation's 2005 Proxy Statement: "Compensation of Directors" and "Executive Compensation", but excluding the sub-section captioned "Total Shareholder Return Performance Graph", which sub-section is not "filed" with the Commission and is not incorporated into this Form 10-K. ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Equity Compensation Plan Information The following table provides information as of December 31, 2004 with respect to shares of First Horizon common stock that may be issued under our existing equity compensation plans, including the 1990 Stock Option Plan (the "1990 Plan"), the 1995 Employee Stock Option Plan (the "1995 Plan"), the 1997 Employee Stock Option Plan (the "1997 Plan"), the 2000 Employee Stock Option Plan (the "Executive Plan"), 2003 Equity Compensation Plan, (the "2003 Plan"), the 2000 Non-employee Directors' Deferred Compensation Stock Option Plan (the "Directors' Plan"), the 1995 Non-employee Directors' Deferred Compensation Stock Option Plan (the "1995 Directors' Plan"), the 1991, 1997 and 2002 Bank Director and Advisory Board Member Deferral Plans (the "Advisory Board Plans") and the 2002 Management Incentive Plan (the "MIP"). Of the 20,432,234 options outstanding, approximately 38 percent were issued in connection with employee and director cash deferral elections. The Corporation received approximately $50,887,000 in employee cash deferrals and $4,213,000 in non-employee directors and advisory board retainer and meeting fee deferrals. The table includes information with respect to shares subject to outstanding options granted under equity compensation plans that are no longer in effect. Footnotes (4) and (5) to the table set forth the total number of shares of First Horizon common stock issuable upon the exercise of options under the expired plans as of December 31, 2004. No additional options may be granted under those expired plans. Equity Compensation Plan Information A B C -------------------- ---------------- ------------------------------ Number of Securities Remaining Available for Future Number of Securities Weighted Average Issuance Under Equity to be Issued upon Exercise Price Compensation Plans Exercise of of Outstanding (Excluding Securities Plan Category Outstanding Options Options Reflected in Column A) - ------------- ------------------- ------- ---------------------- Equity Compensation Plans Approved by Shareowners(1)..................... 4,738,586 (4) $ 29.58 3,687,648 (2) Equity Compensation Plans Not Approved by Shareowners(3)......... 15,693,648 (5) $ 32.35 848,049 ---------- --------- Total*................................ 21,267,851 (6) $ 31.71 4,687,159 (7) * "Total" exceeds sum of column elements as explained in notes (6) and (7). (1) Consists of the Executive Plan, Directors' Plan, 1995 Directors' Plan, 1995 Plan, 1990 Plan, the 2003 Plan and the MIP. 19 (2) Includes shares available for future issuance under the MIP and an additional 1,000,000 shares under the 2003 Plan approved by shareholders in 2004. As of December 31, 2004, an aggregate of 200,000 shares of First Horizon common stock were available for issuance under the MIP. As of December 31, 2004, an aggregate of 1,076,712 shares were available for restricted stock grants under the 2003 Plan. (3) Consists of the 1997 Plan and the Advisory Board Plans. (4) Includes 1,303,070 outstanding options issued in connection with employee and non-employee director cash deferrals of approximately $9,600,000. Also includes information for equity compensation plans that have expired. The Directors' Plan and the 1990 Plan were approved by shareholders in 1995 and 1990, respectively. The plans expired June 1999 and April 2000. As of December 31, 2004, a total of 640,990 shares of First Horizon common stock were issuable upon the exercise of outstanding options under these expired plans. No additional options may be granted under these expired plans. (5) Includes 6,527,221 outstanding options issued in connection with employee and advisory board cash deferrals of approximately $45,500,000. Also includes information for equity compensation plans that have expired. The 1997 Bank Director and Advisory Board Member Deferral Plan and the 1991 Bank Director and Advisory Board Member Deferral Plan expired in January 2002 and January 1997, respectively. As of December 31, 2004, a total of 99,270 shares of First Horizon common stock were issuable upon the exercise of outstanding options under the expired plans. No additional options may be granted under these expired plans. (6) Includes 835,617 shares of First Horizon common stock to be issued at the end of specified deferral periods set forth in individual deferral agreements. (7) Includes 151,462 shares of First Horizon common stock underlying restricted stock units granted under the 1992 Restricted Stock Plan. Description of Equity Compensation Plans Not Approved by Shareholders The 1997 Plan. The 1997 Plan was adopted by the Board of Directors on April 16, 1996 and will expire in April 2006. The 1997 Plan provides for granting of nonqualified stock options. Options granted under the 1997 Plan have been granted to all employees of the Corporation under our FirstShare and management option programs. The FirstShare program is a broad-based employee plan, where all employees of the Corporation receive a stock option award annually, except for management level employees who receive annual stock option awards under the management option program. The FirstShare options vest 100 percent after three years and have a term of 10 years. The management options vest 50 percent after 3 years and 50 percent after 4 years, unless a specified stock price is achieved within the 3 year period. The management options have a term of 7 years. In addition to the above, certain employees could elect to defer a portion of their annual compensation into stock options. These options vest after 6 months and have a term of 20 years for grants made prior to February 2004. The options vest on an accelerated basis in the event of a change in control of First Horizon. All options granted under the 1997 Plan have an exercise price equal to the fair market value on the date of grant. Notwithstanding the above, the option price per share could have been less than 100 percent of the fair market value of the share at the time the option was granted if the employee entered into an agreement with the Corporation to receive a stock option grant in lieu of compensation and the amount of compensation foregone when added to the cash exercise price of the options equaled at least the fair market value of the shares on the date of grant. In January 2005, the Compensation Committee of the Board of Directors terminated the employee option deferral program; however, previously granted deferral options were unaffected by that termination. 20 As of December 31, 2004, options covering 15,572,848 shares of First Horizon common stock were outstanding under the 1997 Plan, 672,397 shares remained available for future option grants, and options covering 2,106,581 shares had been exercised during the year. Of the options outstanding, approximately 41 percent were issued in connection with employee cash deferral elections. The Corporation received approximately $44,020,000 in cash deferrals to offset a portion of the exercise price. Of the 672,397 shares remaining available for future option grants, approximately all are expected to be granted with an option term of 10 years or less. The 1997 Plan has been filed as Exhibit 10(c) in the Corporation's Form 10-Q for the quarter ended September 30, 2002. The Advisory Board Plans. The Advisory Board Plans were adopted by the Board of Directors in October 2001, January 1997 and January 1991. The 2002 Advisory Board Plan will expire on January 1, 2007 and the 1997 and 1991 plans expired in 2002 and 1997, respectively. The 2002 Advisory Board Plan provides granting of nonqualified stock options to bank regional and advisory board members who choose to forego board fees and retainers in exchange for stock options on shares of the Corporation's common stock. Options granted under the Advisory Board Plans are granted only to regional and advisory board members who are not employees. The options are granted in lieu of the participants receiving retainers or attendance fees for bank board and advisory board meetings. The number of shares subject to grant will be the amount of fees/retainers earned divided by one half of the fair market value of one share of common stock on the date of option grant. The exercise price plus the amount of fees foregone will equal the fair market value of the stock on the date of the grant. The options vest after 6 months and have a term of 20 years for grants made prior to February 2004, and a term of 10 years for grants made subsequent to January 2004. In January 2005, the Compensation Committee approved the termination of the deferral stock option program generally; as a consequence of that action, it is anticipated that the 2002 Advisory Board Plan will be terminated by formal Board action in 2005. As of December 31, 2004, options covering 120,800 shares of First Horizon common stock were outstanding under the Advisory Board Plans, 175,652 shares remained available for future option grants, and options covering 14,025 shares had been exercised during the year. The Advisory Board Plans have been filed as Exhibit 10(s) to the Corporation's Form 10-Q for the quarter ended June 30, 2004, and Exhibits 10(t) and 10(u) to the Corporation's Form 10-K for the year 2002. Beneficial Ownership of Corporation Stock The information required by this Item pursuant to Item 403(a) and (b) of Regulation S-K is incorporated herein by reference to the "Stock Ownership Information and Table" section of the Corporation's 2005 Proxy Statement. Change in Control Arrangements The Corporation is unaware of any arrangements which may result in a change in control of the Corporation. ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information called for by this Item is incorporated herein by reference to the "Certain Relationships and Related Transactions" section of the 2005 Proxy Statement. 21 ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES The Audit Committee of the Board of Directors has adopted an Audit and Non-Audit Services Pre-Approval Policy, a copy of which is set forth as part of Appendix B to the Corporation's 2005 Proxy Statement (pages B-6 - B-8) and is incorporated herein by reference. Information regarding fees billed to the Corporation by KPMG LLC for the two most recent fiscal years is incorporated herein by reference to the "Vote Item No. 2"section of the 2005 Proxy Statement. No services were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(c) of Regulation S-X. PART IV ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed as a part of this Report: Financial Statements: Page 56* 1. Consolidated Statements of Condition as of December 31, 2004 and 2003. Page 57* 2. Consolidated Statements of Income for the years ended December 31, 2004, 2003 and 2002. Page 58* 3. Consolidated Statements of Shareholders' Equity for the years ended December 31, 2004, 2003, and 2002. Page 59* 4. Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002. Pages 60-111* 5. Notes to the Consolidated Financial Statements Pages 54-55* 6. Reports of Independent Registered Public Accounting Firm *The consolidated financial statements of the Corporation, the notes thereto, and the reports of independent public accountants, as listed above, are incorporated herein by reference to the indicated pages of the Corporation's 2004 Annual Report to shareholders. Financial Statement Schedules: Not applicable. Exhibits: Exhibits marked with an "*" represent a management contract or compensatory plan or arrangement required to be identified and filed as an exhibit. Exhibits marked with a "+" are filed herewith. 22 3.1 Amended and Restated Charter of the Corporation, incorporated herein by reference to Exhibit 3(i) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 3-31-04. 3.2+ Bylaws of the Corporation, as amended and restated as of 1-18-05. 4.1 Shareholder Protection Rights Agreement, dated as of October 20, 1998, between the Corporation and First Tennessee Bank National Association, as Rights Agent, including as Exhibit A the forms of Rights Certificate and Election to Exercise and as Exhibit B the form of Articles of Amendment designating Participating Preferred Stock, incorporated herein by reference to Exhibits 1, 2, and 3 to the Corporation's Registration Statement on Form 8-A filed 10-23-98. 4.2 The Corporation and certain of its consolidated subsidiaries have outstanding certain long-term debt. See Note 10 in the Corporation's 2004 Annual Report to shareholders. At December 31, 2004, none of such debt exceeded 10% of the total assets of the Corporation and its consolidated subsidiaries. Thus, copies of constituent instruments defining the rights of holders of such debt are not required to be included as exhibits. The Corporation agrees to furnish copies of such instruments to the Securities and Exchange Commission upon request. 4.3 Three principal agreements related to a note program for First Tennessee Bank National Association (the "Bank"): (i) form of Distribution Agreement dated February 18, 2005 among the registrant, the Bank, and the agents therein named; (ii) form of Fiscal and Paying Agency Agreement dated as of February 18, 2005 between the Bank and JPMorgan Chase Bank, National Association; and (iii) form of Interest Calculation Agreement dated as of February 18, 2005 between the Bank and JPMorgan Chase Bank, National Association. All such agreements are incorporated herein by reference to Exhibit 4(c) to the Corporation's Current Report on Form 8-K filed February 25, 2005. *Deferral Plans and Related Exhibits *10.1(a) Directors and Executives Deferred Compensation Plan, as amended and restated, incorporated herein by reference to Exhibit 10(h) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-03 and form of individual agreement, incorporated herein by reference to Exhibit 10(h) to the Corporation's 1996 Annual report on Form 10-K. *10.1(b) Director Deferral Agreements with schedule, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1992 Annual Report on Form 10-K and Exhibit 10(j) to the Corporation's 1995 Annual Report on Form 10-K. *10.1(c) First Tennessee National Corporation Nonqualified Deferred Compensation Plan, incorporated herein by reference to Exhibit 10(a) to the Corporation's 2003 Annual Report on Form 10-K. *10.1(d) Non-Employee Directors' Deferred Compensation Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(m) to the Corporation's 1997 Annual Report on Form 10-K. *10.1(e) 2000 Non-Employee Directors' Deferred Compensation Stock Option Plan, as amended and restated 4-20-04, incorporated herein by reference to Exhibit 10(n) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. 23 *10.1(f) [1991] Bank Advisory Director Deferral Plan, incorporated herein by reference to Exhibit 10(u) to the Corporation's 2002 Annual Report on Form 10-K. *10.1(g) [1997] Bank Director and Advisory Board Member Deferral Plan, incorporated herein by reference to Exhibit 10(t) to the Corporation's 2002 Annual Report on Form 10-K. *10.1(h) 2002 Bank Director and Advisory Board Member Deferral Plan, as amended and restated 4-20-04, incorporated herein by reference to Exhibit 10(s) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.1(i) First Horizon Nonqualified Deferred Compensation Plan, incorporated herein by reference to Exhibit 4(c) to the Corporation's Registration Statement on Form S-8 (No. 333-106015), filed June 11, 2003. *10.1(j) FTN Financial Deferred Compensation Plan, incorporated herein by reference to Exhibit 4.3 to the Corporation's Registration Statement on Form S-8 (No. 333-110845), filed December 1, 2003. *10.1(k) Form of Deferred Compensation Agreement used under the registrant's 2003 Equity Compensation Plan and First Tennessee National Corporation Non-Qualified Deferred Compensation Plan, along with form of Salary, Commission, and Annual Bonus Deferral Programs Overview, form of Deferred Stock Option ("DSO") Program Summary, and description of share receipt deferral feature, incorporated herein by reference to Exhibit 10(z) to the Corporation's Current Report on Form 8-K dated January 3, 2005. *Stock-Based Incentive Plans *10.2(a) 1990 Stock Option Plan, as amended, and 1-21-97, 10-22-97, and 10-18-00 amendments, incorporated herein by reference to Exhibit 10(f) to the Corporation's 1992, 1996, 1997 and 2000 Annual Reports on Form 10-K. *10.2(b) 1992 Restricted Stock Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10(d) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 3-31-99. *10.2(c) 1995 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(l) to the Corporation's 2000 Annual Report on Form 10-K. *10.2(d) 1997 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(c) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-02. *10.2(e) 2000 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(b) to the Corporation's 2000 Annual Report on Form 10-K. 24 *10.2(f) 2003 Equity Compensation Plan, incorporated herein by reference to Appendix A to the Corporation's Proxy Statement furnished to shareholders in connection with the annual meeting held on April 20, 2004, filed March 10, 2004. *TARSAP/PARSAP Restricted Stock Agreements and Related Documents *10.3(a)+ Form of accelerated (performance based) Restricted Stock Agreement under the 1992 Restricted Stock Incentive Plan *10.3(b)+ Form of accelerated (performance based) Restricted Stock Agreement under the 2003 Equity Compensation Plan *10.3(c)+ Description of performance criteria related to TARSAP/PARSAP awards granted prior to 2005 *LTIP Documents *10.4(a)+ Form of Notice of 2003 LTIP award under the 2003 Equity Compensation Plan, with form of related Restricted Stock Agreement. Messrs. Burkett, Hughes, and Baker are the executive officers whose bonuses are based on a measure of business unit earnings, as described in the bracketed text in Section 5.0 of the Notice and in Exhibit A to the Restricted Stock Agreement; however, Messrs. Hughes and Baker received no Restricted Stock Agreement in connection with their 2003 LTIP awards. *10.4(b)+ Form of Notice of 2004 LTIP award under the 2003 Equity Compensation Plan. Messrs. Burkett, Hughes, and Baker are the executive officers whose bonuses are based on a measure of business unit earnings, as described in the bracketed text in Section 5.0 of the Notice. *10.4(c)+ Form of Notice of 2005 LTIP award under the 2003 Equity Compensation Plan. Messrs. Burkett, Hughes, Baker, and Martin are the executive officers whose bonuses are based on a measure of business unit earnings, as noted in the exhibit. *Other Stock-Based Incentive Plan Agreements and Related Documents *10.5(a) Form of Restricted Stock Agreement for Non-Employee Director used under the 2003 Equity Compensation Plan, incorporated herein by reference to Exhibit 10(aa) to the Corporation's Current Report on Form 8-K dated January 18, 2005. *10.5(b)+ April 2003 Restricted Stock Agreement under the 2003 Equity Compensation Plan with J. Kenneth Glass. *10.5(c)+ Form of Agreement To Defer Receipt Of Shares Following Option Exercise. *10.5(d)+ Form of Agreement to Exchange Shares for RSUs and Defer Receipt of Shares [relating to Restricted Stock] *10.5(e)+ Form of Stock Option Grant Notice *10.5(f)+ Form of Stock Option Reload Grant Notification *Management Cash Incentive Plan Documents *10.6(a) 2002 Management Incentive Plan, incorporated herein by reference to Exhibit 10(q) to the Corporation's 2001 Annual Report on Form 10-K. *10.6(b) Description of target payouts and performance criteria approved for 2005 annual cash bonuses to executive officers under the 2002 Management Incentive Plan, incorporated 25 herein by reference to the third paragraph under the caption "Salary and Annual Bonus Action" reported under Item 1.01 of the Corporation's Current Report on Form 8-K filed February 28, 2005. Other Material Contract Exhibits *10.7 Form of Severance Agreements dated 1-28-97, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1996 Annual Report on Form 10-K. *10.8 Survivor Benefits Plan, as amended and restated, incorporated herein by reference to Exhibit 10(g) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-03. *10.9 Non-employee Director Benefits, incorporated herein by reference to Exhibit 10(p) to the Corporation's 2003 Annual Report on Form 10-K. The benefit described in this exhibit relating to the possible repurchase of shares of the Corporation's common stock is available to the Corporation's executive officers as well as to its directors. *10.10 Long-Term Disability Program, incorporated herein by reference to Exhibit 10(v) to the Corporation's 2003 Annual Report on Form 10-K. *10.11 Amended and Restated Pension Restoration Plan, as amended and restated 4-20-04, incorporated herein by reference to Exhibit 10(i) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.12 Jim L. Hughes employment agreement, incorporated herein by reference to Exhibit 10(w) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.13+ Form of Indemnity Agreement between the Corporation and its directors and executive officers. *10.14 Description of salaries approved for executive officers for 2005, incorporated herein by reference to the first paragraph under the caption "Salary and Annual Bonus Action" reported under Item 1.01 of the Corporation's Current Report on Form 8-K filed February 28, 2005. 13+ Pages 2 through 114 of the First Horizon National Corporation 2004 Annual Report to shareholders, a copy of which is furnished for the information of the Securities and Exchange Commission. Portions of the Annual Report not incorporated herein by reference are deemed not to be "filed" with the Commission. 14 Code of Ethics for Senior Financial Officers, incorporated herein by reference to Exhibit 14 to the Corporation's 2003 Annual Report on Form 10-K 21+ Subsidiaries of the Corporation. 23+ Accountant's Consents. 24+ Powers of Attorney. 26 31(a)+ Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 31(b)+ Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 32(a)+ 18 USC 1350 Certifications of CEO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) 32(b)+ 18 USC 1350 Certifications of CFO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) 27 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST HORIZON NATIONAL CORPORATION Date: March 11, 2005 By: /s/ Marlin L. Mosby, III ----------------------- Marlin L. Mosby, III, Executive Vice President, and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- J. Kenneth Glass* Chairman of the Board, President, March 11, 2005 - -------------------------- Chief Executive Officer J. Kenneth Glass and a Director (principal executive officer) Marlin L. Mosby, III* Executive Vice President and Chief March 11, 2005 - --------------------------- Financial Officer (principal Marlin L. Mosby, III financial officer) James F. Keen* Executive Vice President and March 11, 2005 - ---------------------------- Corporate Controller (principal James F. Keen accounting officer) Robert C. Blattberg* Director March 11, 2005 - -------------------------- Robert C. Blattberg Director - -------------------------- George E. Cates Simon F. Cooper* Director March 11, 2005 - ------------------------- Simon F. Cooper James A. Haslam, III* Director March 11, 2005 - ------------------------ James A. Haslam, III R. Brad Martin* Director March 11, 2005 - -------------------------- R. Brad Martin Vicki R. Palmer * Director March 11, 2005 - ------------------------- Vicki R. Palmer Michael D. Rose* Director March 11, 2005 - ------------------------ Michael D. Rose Mary F. Sammons* Director March 11, 2005 - ----------------------- Mary F. Sammons 28 William B. Sansom* Director March 11, 2005 - ----------------------- William B. Sansom Jonathan P. Ward* Director March 11, 2005 - ------------------------ Jonathan P. Ward Luke Yancy III* Director March 11, 2005 - ------------------------ Luke Yancy III *By: /s/ Clyde A. Billings, Jr. March 11, 2005 ------------------------------- Clyde A. Billings, Jr. As Attorney-in-Fact 29 EXHIBIT INDEX Exhibits marked with an "*" represent a management contract or compensatory plan or arrangement required to be identified and filed as an exhibit. Exhibits marked with a "+" are filed herewith. 3.1 Amended and Restated Charter of the Corporation, incorporated herein by reference to Exhibit 3(i) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 3-31-04. 3.2+ Bylaws of the Corporation, as amended and restated as of 1-18-05. 4.1 Shareholder Protection Rights Agreement, dated as of October 20, 1998, between the Corporation and First Tennessee Bank National Association, as Rights Agent, including as Exhibit A the forms of Rights Certificate and Election to Exercise and as Exhibit B the form of Articles of Amendment designating Participating Preferred Stock, incorporated herein by reference to Exhibits 1, 2, and 3 to the Corporation's Registration Statement on Form 8-A filed 10-23-98. 4.2 The Corporation and certain of its consolidated subsidiaries have outstanding certain long-term debt. See Note 10 in the Corporation's 2004 Annual Report to shareholders. At December 31, 2004, none of such debt exceeded 10% of the total assets of the Corporation and its consolidated subsidiaries. Thus, copies of constituent instruments defining the rights of holders of such debt are not required to be included as exhibits. The Corporation agrees to furnish copies of such instruments to the Securities and Exchange Commission upon request. 4.3 Three principal agreements related to a note program for First Tennessee Bank National Association (the "Bank"): (i) form of Distribution Agreement dated February 18, 2005 among the registrant, the Bank, and the agents therein named; (ii) form of Fiscal and Paying Agency Agreement dated as of February 18, 2005 between the Bank and JPMorgan Chase Bank, National Association; and (iii) form of Interest Calculation Agreement dated as of February 18, 2005 between the Bank and JPMorgan Chase Bank, National Association. All such agreements are incorporated herein by reference to Exhibit 4(c) to the Corporation's Current Report on Form 8-K filed February 25, 2005. *Deferral Plans and Related Exhibits *10.1(a) Directors and Executives Deferred Compensation Plan, as amended and restated, incorporated herein by reference to Exhibit 10(h) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-03 and form of individual agreement, incorporated herein by reference to Exhibit 10(h) to the Corporation's 1996 Annual report on Form 10-K. *10.1(b) Director Deferral Agreements with schedule, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1992 Annual Report on Form 10-K and Exhibit 10(j) to the Corporation's 1995 Annual Report on Form 10-K. *10.1(c) First Tennessee National Corporation Nonqualified Deferred Compensation Plan, incorporated herein by reference to Exhibit 10(a) to the Corporation's 2003 Annual Report on Form 10-K. *10.1(d) Non-Employee Directors' Deferred Compensation Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(m) to the Corporation's 1997 Annual Report on Form 10-K. *10.1(e) 2000 Non-Employee Directors' Deferred Compensation Stock Option Plan, as amended and restated 4-20-04, incorporated herein by reference to Exhibit 10(n) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.1(f) [1991] Bank Advisory Director Deferral Plan, incorporated herein by reference to Exhibit 10(u) to the Corporation's 2002 Annual Report on Form 10-K. *10.1(g) [1997] Bank Director and Advisory Board Member Deferral Plan, incorporated herein by reference to Exhibit 10(t) to the Corporation's 2002 Annual Report on Form 10-K. *10.1(h) 2002 Bank Director and Advisory Board Member Deferral Plan, as amended and restated 4-20-04, incorporated herein by reference to Exhibit 10(s) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.1(i) First Horizon Nonqualified Deferred Compensation Plan, incorporated herein by reference to Exhibit 4(c) to the Corporation's Registration Statement on Form S-8 (No. 333-106015), filed June 11, 2003. *10.1(j) FTN Financial Deferred Compensation Plan, incorporated herein by reference to Exhibit 4.3 to the Corporation's Registration Statement on Form S-8 (No. 333-110845), filed December 1, 2003. *10.1(k) Form of Deferred Compensation Agreement used under the registrant's 2003 Equity Compensation Plan and First Tennessee National Corporation Non-Qualified Deferred Compensation Plan, along with form of Salary, Commission, and Annual Bonus Deferral Programs Overview, form of Deferred Stock Option ("DSO") Program Summary, and description of share receipt deferral feature, incorporated herein by reference to Exhibit 10(z) to the Corporation's Current Report on Form 8-K dated January 3, 2005. *Stock-Based Incentive Plans *10.2(a) 1990 Stock Option Plan, as amended, and 1-21-97, 10-22-97, and 10-18-00 amendments, incorporated herein by reference to Exhibit 10(f) to the Corporation's 1992, 1996, 1997 and 2000 Annual Reports on Form 10-K. *10.2(b) 1992 Restricted Stock Incentive Plan, as amended and restated, incorporated herein by reference to Exhibit 10(d) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 3-31-99. *10.2(c) 1995 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(l) to the Corporation's 2000 Annual Report on Form 10-K. *10.2(d) 1997 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(c) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-02. *10.2(e) 2000 Employee Stock Option Plan, as amended and restated, incorporated herein by reference to Exhibit 10(b) to the Corporation's 2000 Annual Report on Form 10-K. *10.2(f) 2003 Equity Compensation Plan, incorporated herein by reference to Appendix A to the Corporation's Proxy Statement furnished to shareholders in connection with the annual meeting held on April 20, 2004, filed March 10, 2004. *TARSAP/PARSAP Restricted Stock Agreements and Related Documents *10.3(a)+ Form of accelerated (performance based) Restricted Stock Agreement under the 1992 Restricted Stock Incentive Plan *10.3(b)+ Form of accelerated (performance based) Restricted Stock Agreement under the 2003 Equity Compensation Plan *10.3(c)+ Description of performance criteria related to TARSAP/PARSAP awards granted prior to 2005 *LTIP Documents *10.4(a)+ Form of Notice of 2003 LTIP award under the 2003 Equity Compensation Plan, with form of related Restricted Stock Agreement. Messrs. Burkett, Hughes, and Baker are the executive officers whose bonuses are based on a measure of business unit earnings, as described in the bracketed text in Section 5.0 of the Notice and in Exhibit A to the Restricted Stock Agreement; however, Messrs. Hughes and Baker received no Restricted Stock Agreement in connection with their 2003 LTIP awards. *10.4(b)+ Form of Notice of 2004 LTIP award under the 2003 Equity Compensation Plan. Messrs. Burkett, Hughes, and Baker are the executive officers whose bonuses are based on a measure of business unit earnings, as described in the bracketed text in Section 5.0 of the Notice. *10.4(c)+ Form of Notice of 2005 LTIP award under the 2003 Equity Compensation Plan. Messrs. Burkett, Hughes, Baker, and Martin are the executive officers whose bonuses are based on a measure of business unit earnings, as noted in the exhibit. *Other Stock-Based Incentive Plan Agreements and Related Documents *10.5(a) Form of Restricted Stock Agreement for Non-Employee Director used under the 2003 Equity Compensation Plan, incorporated herein by reference to Exhibit 10(aa) to the Corporation's Current Report on Form 8-K dated January 18, 2005. *10.5(b)+ April 2003 Restricted Stock Agreement under the 2003 Equity Compensation Plan with J. Kenneth Glass. *10.5(c)+ Form of Agreement To Defer Receipt Of Shares Following Option Exercise. *10.5(d)+ Form of Agreement to Exchange Shares for RSUs and Defer Receipt of Shares [relating to Restricted Stock] *10.5(e)+ Form of Stock Option Grant Notice *10.5(f)+ Form of Stock Option Reload Grant Notification *Management Cash Incentive Plan Documents *10.6(a) 2002 Management Incentive Plan, incorporated herein by reference to Exhibit 10(q) to the Corporation's 2001 Annual Report on Form 10-K. *10.6(b) Description of target payouts and performance criteria approved for 2005 annual cash bonuses to executive officers under the 2002 Management Incentive Plan, incorporated herein by reference to the third paragraph under the caption "Salary and Annual Bonus Action" reported under Item 1.01 of the Corporation's Current Report on Form 8-K filed February 28, 2005. Other Material Contract Exhibits *10.7 Form of Severance Agreements dated 1-28-97, incorporated herein by reference to Exhibit 10(k) to the Corporation's 1996 Annual Report on Form 10-K. *10.8 Survivor Benefits Plan, as amended and restated, incorporated herein by reference to Exhibit 10(g) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 9-30-03. *10.9 Non-employee Director Benefits, incorporated herein by reference to Exhibit 10(p) to the Corporation's 2003 Annual Report on Form 10-K. The benefit described in this exhibit relating to the possible repurchase of shares of the Corporation's common stock is available to the Corporation's executive officers as well as to its directors. *10.10 Long-Term Disability Program, incorporated herein by reference to Exhibit 10(v) to the Corporation's 2003 Annual Report on Form 10-K. *10.11 Amended and Restated Pension Restoration Plan, as amended and restated 4-20-04, incorporated herein by reference to Exhibit 10(i) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.12 Jim L. Hughes employment agreement, incorporated herein by reference to Exhibit 10(w) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended 6-30-04. *10.13+ Form of Indemnity Agreement between the Corporation and its directors and executive officers. *10.14 Description of salaries approved for executive officers for 2005, incorporated herein by reference to the first paragraph under the caption "Salary and Annual Bonus Action" reported under Item 1.01 of the Corporation's Current Report on Form 8-K filed February 28, 2005. 13+ Pages 2 through 114 of the First Horizon National Corporation 2004 Annual Report to shareholders, a copy of which is furnished for the information of the Securities and Exchange Commission. Portions of the Annual Report not incorporated herein by reference are deemed not to be "filed" with the Commission. 14 Code of Ethics for Senior Financial Officers, incorporated herein by reference to Exhibit 14 to the Corporation's 2003 Annual Report on Form 10-K 21+ Subsidiaries of the Corporation. 23+ Accountant's Consents. 24+ Powers of Attorney. 31(a)+ Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 31(b)+ Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of Sarbanes-Oxley Act of 2002) 32(a)+ 18 USC 1350 Certifications of CEO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) 32(b)+ 18 USC 1350 Certifications of CFO (pursuant to Section 906 of Sarbanes-Oxley Act of 2002) STATEMENT OF DIFFERENCES The greater-than-or-equal-to sign shall be expressed as.......................>=