FIRST HORIZON CORP Stock Forecasts | FHN EPS & Price Predictions

EX-99.1 2 a4q19financialsuppleme.htm EXHIBIT 99.1 FINANCIAL SUPPLEMENT Exhibit

FOURTH QUARTER 2019

FINANCIAL SUPPLEMENT

If you need further information, please contact:

Aarti Bowman, Investor Relations

901-523-4017

aagoorha@firsthorizon.com

FHN TABLE OF CONTENTS




	Page

First Horizon National Corporation Segment Structure	3

Performance Highlights	4

Consolidated Results
Income Statement
Income Statement	7
Other Income and Other Expense	8
Acquisition, Restructuring, and Rebranding Expense	9
Balance Sheet
Period End Balance Sheet	10
Average Balance Sheet	11
Net Interest Income	12
Average Balance Sheet: Yields and Rates	13

Capital Highlights	14

Business Segment Detail
Segment Highlights	15
Regional Banking	16
Fixed Income and Corporate	17
Non-Strategic	18

Asset Quality
Asset Quality: Consolidated	19
Asset Quality: Regional Banking and Corporate	21
Asset Quality: Non-Strategic	22

Non-GAAP to GAAP Reconciliation	23

Glossary of Terms	24

Other Information

This financial supplement contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, customer and investor responses to these conditions, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, natural disasters, and items mentioned in this financial supplement and in First Horizon National Corporation’s (“FHN”) most recent earnings release, as well as critical accounting estimates and other factors described in FHN’s recent filings with the SEC. FHN disclaims any obligation to update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements to reflect future events or developments.

Use of Non-GAAP Measures and Regulatory Measures that are not GAAP

Certain measures are included in this financial supplement that are “non-GAAP,” meaning (under U.S. financial reporting rules) they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.

Presentation of regulatory measures, some of which follow regulatory definitions rather than GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN. Such measures are used by the various banking regulators in reviewing the performance, stability, and capital adequacy of financial institutions they regulate. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this financial supplement include: common equity tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; risk weighted assets (“RWA”), which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios; and pre-provision net revenue (“PPNR”), calculated by adding the provision/(provision credit) for loan losses to income before income taxes, excluding securities gains/(losses).

The non-GAAP measures presented in this financial supplement are return on average tangible common equity (“ROTCE”), tangible common equity (“TCE”) to tangible assets (“TA”), and tangible book value ("TBV") per common share.

Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items on page 23 of this financial supplement.



FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE



FHN PERFORMANCE HIGHLIGHTS

Summary of Fourth Quarter 2019 Notable Items
Segment	Item	Income Statement	Amount Favorable/ (Unfavorable)	Comments
Corporate	Acquisition expenses	Noninterest expense: various	$(15.7) million	Pre-tax acquisition-related expenses largely associated with the pending merger of equals with IBERIABANK Corporation ("IBKC")

Corporate	Charitable contributions	Noninterest expense: other	$(11.0) million	Pre-tax expense related to charitable contributions

Corporate	Rebranding expenses	Noninterest expense: various	$(9.1) million	Pre-tax expense associated with marketing and advertising expenses, professional fees and technology-related expenses

Corporate	Restructuring, repositioning, and efficiency initiatives	Noninterest expense: various	$(1.2) million	Pre-tax expense associated with professional fees and severance-related costs associated with efficiency initiatives

Fourth Quarter 2019 vs. Third Quarter 2019



Consolidated								l Diluted EPS of $.37 in 4Q19, up from $.35 in 3Q19 l Total revenue up 5% due to higher fees and an increase in NII l Fee income up 7% due to higher fixed income revenue, market-driven increases in deferred compensation income, increased collections on loans charged off prior to acquisition (primarily associated with one loan), and increased fees from derivative sales l NII up 4% due to higher loan accretion and lower funding costs, somewhat offset by the negative impact of lower interest rates on loans (including LIBOR and Prime) l NIM increased to 3.26% in 4Q19 from 3.21% in 3Q19; increase due to the same factors affecting NII l Loan loss provision decreased to $10 million in 4Q19, from $15 million in 3Q19 l Expenses up 6% due to higher personnel, acquisition, and rebranding- related expenses, somewhat offset by lower litigation expenses and restructuring-related expenses l Average loan growth of 2%; Average deposit growth of 1%

(Thousands, except per share data)	4Q19		3Q19		Change
Income Statement
Net interest income	$	311,393	$	300,676	4		%
Noninterest income	183,307		171,735		7		%
Total revenues	494,700		472,411		5		%
Provision for loan losses	10,000		15,000		(33	)	%
Noninterest expense	327,447		307,672		6		%
Income before income taxes	157,253		149,739		5		%
Provision for income taxes	35,970		35,796		*
Net income/(loss)	$	121,283	$	113,943	6		%
Diluted EPS	$	0.37	$	0.35	6		%

Balance Sheet (millions)
Average Loans	$	30,706	$	30,016	2		%
Average Deposits	32,777		32,371		1		%
* Amount is less than one percent.



Regional Banking								l Strong average loan growth l Loan growth due to increases in C&I and specialty areas, with particular strength in loans to mortgage companies l NII up from higher loan accretion and commercial loan growth l Fee income up 4% due to an increase in collections on loans charged off prior to acquisition, higher fees from derivative sales, and an increase in bankcard income l Provision expense in 4Q19 largely driven by commercial loan growth; 3Q19 included amounts related to a single unreserved commercial credit, commercial loan growth, and modest grade migration l Expense up 5% due in large part to higher strategic reinvestments in technology, advertising, and personnel expenses

(Thousands)	4Q19		3Q19		Change
Net interest income	$	310,696	$	302,370	3		%
Noninterest income	89,553		85,776		4		%
Total revenues	400,249		388,146		3		%
Provision for loan losses	14,369		20,472		(30	)	%
Noninterest expense	202,967		193,250		5		%
Income before income taxes	$	182,913	$	174,424	5		%
PPNR (a)	197,282		194,896		1		%

Balance Sheet (millions)
Average loans	$	29,722	$	28,958	3		%
Average deposits	30,413		30,044		1		%
(a) Pre-provision net revenue is not a GAAP number but is used in regulatory stress test reporting. The presentation of PPNR in this Financial Supplement follows the regulatory definition.



Fixed Income								l 4Q19 ADR of $1.1 million, compared to ADR of $994 thousand in 3Q19, up 7% with growth across multiple trading desks l Steeper yield curve and market volatility favorably impacted 4Q19 activity l Other product revenue up $1.3 million from loan and derivative sales l Expense down 8% due to lower fees associated with legal matters, somewhat offset by higher variable compensation associated with increased revenues

(Thousands)	4Q19		3Q19		Change
Net interest income	$	7,233	$	5,309	36		%
Noninterest income	81,185		77,809		4		%
Total revenues	88,418		83,118		6		%
Noninterest expense	62,329		67,787		(8	)	%
Income before income taxes	$	26,089	$	15,331	70		%



FHN PERFORMANCE HIGHLIGHTS (continued)

Fourth Quarter 2019 vs. Third Quarter 2019 (continued)



Corporate										l Fee income up from market-driven higher deferred compensation income and an increase in BOLI policy benefits l Expense increase primarily driven by $11.0 million of charitable contributions and higher acquisition-and rebranding-related expenses, somewhat offset by lower restructuring costs associated with efficiency initiatives

(Thousands)	4Q19			3Q19			Change
Net interest income	$	(12,712	)	$	(13,225	)	4		%
Noninterest income	11,246			7,359			53		%
Total revenues	(1,466		)	(5,866		)	75		%
Noninterest expense	57,816			41,993			38		%
Income before income taxes	$	(59,282	)	$	(47,859	)	(24	)	%
NM - Not meaningful



Non-Strategic										l Non-Strategic results reflect continuing wind-down of the loan portfolio

(Thousands)	4Q19			3Q19			Change
Net interest income	$	6,176		$	6,222		(1	)	%
Noninterest income	1,323			791			67		%
Total revenues	7,499			7,013			7		%
Provision for loan losses	(4,369		)	(5,472		)	20		%
Noninterest expense	4,335			4,642			(7	)	%
Income before income taxes	$	7,533		$	7,843		(4	)	%

Balance Sheet (millions)
Average loans	$	852		$	935		(9	)	%
NM - Not meaningful



Asset Quality										l Increase in reserves primarily driven by loan growth within the commercial portfolio, partially offset by declining balances in the non-strategic portfolio l Decrease in net charge-offs largely driven by the Regional banking commercial portfolio; 3Q19 net-charge-offs largely driven by two commercial credits l NPLs within the Regional banking and Non-strategic portfolios decreased $5.6 million and $4.8 million, respectively, in 4Q19 primarily driven by improvements in the consumer real estate portfolios l Regional banking 30+ delinquencies decreased $12.0 million; Non-strategic down $.7 million

(Thousands)	4Q19			3Q19			Change
Allowance for loan losses	$200,307			$193,149			4		%
Allowance / loans %	0.64		%	0.62		%
Net Charge-offs	$	2,842		$	14,600		(81	)	%
Net charge-offs %	0.04		%	0.19		%
Nonperforming Loans (a)	$162,165			$172,495			(6	)	%
NPL %	0.52		%	0.55		%
30+ delinquencies	$	57,911		$	58,861		(2	)	%
30+ delinquencies %	0.19		%	0.23		%
(a) Excludes loans held-for-sale.



Capital and Liquidity								l Declared quarterly dividend of $.14 in 4Q19; dividend payout of 37% l No share repurchases in 4Q19 compared to 1.8 million shares (weighted average price - $15.73) repurchased in 3Q19; due to the pending IBKC merger, significant repurchases are not expected in 1Q20 l $270.7 million remaining authorization under the stock purchase authorization first announced in January 2018, scheduled to expire January 31, 2021 l 4Q19 increase in risk-based capital ratios largely driven by an increase in Common Equity Tier 1 capital due to no share repurchases during the quarter

(millions)	4Q19			3Q19			Change
Common dividends declared (a)	$	43.5		$	43.5		*
Preferred dividends declared	$	1.6		$	1.6		*
Share repurchases	$	—		$	28.2		NM
Capital Ratios (b)
Common Equity Tier 1	9.20		%	9.01		%
Tier 1	10.15		%	9.97		%
Total Capital	11.22		%	11.01		%
Leverage	9.04		%	9.05		%
NM - Not meaningful
* Amount is less than one percent.
(a) 4Q19 common dividends paid January 2, 2020; 3Q19 common dividends paid October 1, 2019.
(b) Regulatory capital ratios calculated under the Basel III risk-based capital rules as phased-in; current quarter is an estimate.



FHN PERFORMANCE HIGHLIGHTS (continued)


Consolidated Results for Fiscal Year 2019 vs. 2018



Consolidated								l 2019 diluted EPS of $1.38 compared to $1.65 in 2018; 2018 includes $212.9 million pre-tax gain on the sale of Visa Class B Shares l NII relatively flat compared to 2018, as an increase in deposit costs and lower loan accretion were mitigated with strong commercial loan and deposit growth and higher loan yields l NIM of 3.28% in 2019 compared to 3.45% in 2018; decrease in NIM largely driven by an unfavorable rate environment and lower loan accretion l 2019 fee income primarily driven by higher fixed income sales revenue, market-driven increases in deferred compensation income, and higher bank fees; 2018 includes $212.9 million related to the Visa gain l Provision increase primarily driven by commercial loan growth l 2019 expense includes restructuring- and rebranding-related expenses and higher fixed income variable compensation, somewhat offset by lower acquisition-related expenses and broad-based cost savings across multiple line items driven by strategic focus on expense optimization l Strong balance sheet growth: Average loans and deposits up 7% and 5%

(Thousands, except per share data)	2019		2018		Change
Net interest income	$	1,210,187	$	1,220,317	(1	)	%
Noninterest income	654,080		722,788		(10	)	%
Total revenues	1,864,267		1,943,105		(4	)	%
Provision for loan losses	47,000		7,000		NM
Noninterest expense	1,231,603		1,221,996		1		%
Income before income taxes	585,664		714,109		(18	)	%
Provision for income taxes	133,291		157,602		(15	)	%
Net income/(loss)	$	452,373	$	556,507	(19	)	%
Diluted EPS	$	1.38	$	1.65	(16	)	%

Balance Sheet (millions)
Average loans	$	29,189	$	27,214	7		%
Average deposits	32,403		30,903		5		%
NM - Not meaningful

FHN CONSOLIDATED INCOME STATEMENT

Quarterly/Annually, Unaudited



																4Q19 Changes vs.						Twelve Months Ended						2019 vs.
(Dollars in thousands, except per share data)	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18			2019			2018			2018

Interest income	$	404,142		$	407,494		$	412,089		$	400,615		$	401,186		(1	)	%	1		%	$	1,624,340		$	1,546,021		5		%
Less: interest expense	92,749			106,818			108,479			106,107			98,674			(13	)	%	(6	)	%	414,153			325,704			27		%
Net interest income	311,393			300,676			303,610			294,508			302,512			4		%	3		%	1,210,187			1,220,317			(1	)	%
Provision/(provision credit) for loan losses	10,000			15,000			13,000			9,000			6,000			(33	)	%	67		%	47,000			7,000			NM
Net interest income after provision for loan losses	301,393			285,676			290,610			285,508			296,512			6		%	2		%	1,163,187			1,213,317			(4	)	%
Noninterest income:
Fixed income (a)	80,981			77,645			66,414			53,749			39,866			4		%	NM			278,789			167,882			66		%
Deposit transactions and cash management (b)	33,289			34,379			32,374			31,621			25,422			(3	)	%	31		%	131,663			133,281			(1	)	%
Brokerage, management fees and commissions	14,557			14,157			14,120			12,633			13,380			3		%	9		%	55,467			54,803			1		%
Trust services and investment management	7,434			7,163			7,888			7,026			6,959			4		%	7		%	29,511			29,806			(1	)	%
Bankcard income	7,984			7,017			6,355			6,952			7,570			14		%	5		%	28,308			29,304			(3	)	%
Bank-owned life insurance	5,255			4,427			5,126			4,402			4,852			19		%	8		%	19,210			18,955			1		%
Securities gains/(losses), net (c)	(3		)	97			49			31			(28		)	NM			89		%	174			212,948			NM
Other (d)	33,810			26,850			25,667			24,631			12,253			26		%	NM			110,958			75,809			46		%
Total noninterest income	183,307			171,735			157,993			141,045			110,274			7		%	66		%	654,080			722,788			(10	)	%
Adjusted gross income after provision for loan losses	484,700			457,411			448,603			426,553			406,786			6		%	19		%	1,817,267			1,936,105			(6	)	%
Noninterest expense:
Employee compensation, incentives, and benefits (e) (f)	178,761			167,022			171,643			177,925			156,240			7		%	14		%	695,351			658,223			6		%
Legal fees (f)	2,709			4,854			6,486			2,831			3,479			(44	)	%	(22	)	%	16,880			11,149			51		%
Professional fees (f)	16,718			14,910			11,291			12,299			8,842			12		%	89		%	55,218			45,799			21		%
Occupancy (f)	19,972			18,887			20,719			20,693			22,053			6		%	(9	)	%	80,271			85,009			(6	)	%
Computer software	15,390			15,191			15,001			15,139			14,656			1		%	5		%	60,721			60,604			*
Contract employment and outsourcing	3,160			3,256			3,078			3,371			4,248			(3	)	%	(26	)	%	12,865			18,522			(31	)	%
Operations services	11,171			11,634			11,713			11,488			12,945			(4	)	%	(14	)	%	46,006			56,280			(18	)	%
Equipment rentals, depreciation, and maintenance	8,597			8,197			8,375			8,829			8,983			5		%	(4	)	%	33,998			39,132			(13	)	%
FDIC premium expense	5,806			5,564			4,247			4,273			5,200			4		%	12		%	19,890			31,642			(37	)	%
Advertising and public relations (f)	14,897			6,646			5,574			7,242			7,718			NM			93		%	34,359			24,752			39		%
Communications and courier	5,597			5,650			7,380			6,453			7,256			(1	)	%	(23	)	%	25,080			30,032			(16	)	%
Amortization of intangible assets	6,206			6,206			6,206			6,216			6,461			*			(4	)	%	24,834			25,855			(4	)	%
Other (d)	38,463			39,655			28,681			19,331			23,851			(3	)	%	61		%	126,130			134,997			(7	)	%
Total noninterest expense	327,447			307,672			300,394			296,090			281,932			6		%	16		%	1,231,603			1,221,996			1		%
Income before income taxes	157,253			149,739			148,209			130,463			124,854			5		%	26		%	585,664			714,109			(18	)	%
Provision for income taxes	35,970			35,796			34,467			27,058			24,049			*			50		%	133,291			157,602			(15	)	%
Net income/(loss)	121,283			113,943			113,742			103,405			100,805			6		%	20		%	452,373			556,507			(19	)	%
Net income attributable to noncontrolling interest	2,910			2,883			2,852			2,820			2,910			1		%	*			11,465			11,465			*
Net income/(loss) attributable to controlling interest	118,373			111,060			110,890			100,585			97,895			7		%	21		%	440,908			545,042			(19	)	%
Preferred stock dividends	1,550			1,550			1,550			1,550			1,550			*			*			6,200			6,200			*
Net income/(loss) available to common shareholders	$	116,823		$	109,510		$	109,340		$	99,035		$	96,345		7		%	21		%	$	434,708		$	538,842		(19	)	%
Common Stock Data
EPS	$	0.38		$	0.35		$	0.35		$	0.31		$	0.30		9		%	27		%	$	1.39		$	1.66		(16	)	%
Basic shares (thousands)	311,250			311,888			314,063			317,435			321,505			*			(3	)	%	313,637			324,375			(3	)	%
Diluted EPS	$	0.37		$	0.35		$	0.35		$	0.31		$	0.30		6		%	23		%	$	1.38		$	1.65		(16	)	%
Diluted shares (thousands)	313,353			313,805			315,786			319,581			323,885			*			(3	)	%	315,657			327,445			(4	)	%
Key Ratios & Other
Return on average assets (quarters are annualized) (g)	1.12		%	1.08		%	1.11		%	1.03		%	0.99		%							1.08		%	1.38		%
Return on average common equity (“ROCE”) (quarters are annualized) (g)	9.97		%	9.50		%	9.79		%	9.09		%	8.81		%							9.60		%	12.75		%
Return on average tangible common equity (“ROTCE”) (quarters are annualized) (g) (h)	15.03		%	14.49		%	15.12		%	14.17		%	13.80		%							14.71		%	20.28		%
Fee income to total revenue (g)	37.05		%	36.34		%	34.22		%	32.38		%	26.72		%							35.08		%	29.47		%
Efficiency ratio (g)	66.19		%	65.14		%	65.08		%	67.99		%	68.30		%							66.07		%	70.63		%
Average full time equivalent employees	5,005			5,116			5,287			5,524			5,563									5,231			5,723

NM - Not meaningful

* Amount is less than one percent.


(a)	2Q19 includes $1.1 million of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.


(b)	4Q18 includes an $8.7 million unfavorable adjustment related to the return of excess fees received on Capital Bank debit card transactions.


(d)	Refer to the Other Income and Other Expense table on page 8 for additional information.


(e)	4Q19, 3Q19, 2Q19 and 1Q19 include severance-related costs associated with efficiency initiatives, refer to the Restructuring expense table on page 9 for additional information; 1Q19 and 4Q18 include $6.2 million and $(7.1) million, respectively, of deferred compensation expense.


(f)	Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 9 for additional information about variability in quarterly balances.


(g)	See Glossary of Terms for definitions of Key Ratios.


(h)	This non-GAAP measure is reconciled to ROCE (GAAP) in the Non-GAAP to GAAP reconciliation on page 23 of this financial supplement.

FHN OTHER INCOME AND OTHER EXPENSE

Quarterly/Annually, Unaudited



																4Q19 Changes vs.						Twelve Months Ended						2019 vs.
(Thousands)	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18			2019			2018			2018

Other Income
ATM and interchange fees	$	4,529		$	4,507		$	4,262		$	3,241		$	3,411		*			33		%	$	16,539		$	13,354		24		%
Dividend income	1,508			1,556			1,809			2,313			2,425			(3	)	%	(38	)	%	7,186			10,555			(32	)	%
Electronic banking fees	1,101			1,288			1,267			1,271			1,393			(15	)	%	(21	)	%	4,927			5,134			(4	)	%
Letter of credit fees	1,561			1,400			1,253			1,368			1,447			12		%	8		%	5,582			5,298			5		%
Mortgage banking	3,578			2,019			2,572			1,886			3,077			77		%	16		%	10,055			10,587			(5	)	%
Deferred compensation (a)	3,339			472			1,938			5,474			(6,124		)	NM			NM			11,223			(3,224		)	NM
Insurance commissions	358			577			566			624			467			(38	)	%	(23	)	%	2,125			2,096			1		%
Other service charges	5,755			5,738			5,624			3,869			3,513			*			64		%	20,986			15,122			39		%
Gain/(loss) on extinguishment of debt	65			(6		)	—			(1		)	(14		)	NM			NM			58			(15		)	NM
Other (b)	12,016			9,299			6,376			4,586			2,658			29		%	NM			32,277			16,902			91		%
Total	$	33,810		$	26,850		$	25,667		$	24,631		$	12,253		26		%	NM			$	110,958		$	75,809		46		%

Other Expense
Litigation and regulatory matters	$	(394	)	$	11,534		$	(8,230	)	$	13		$	35		NM			NM			$	2,923		$	644		NM
Tax credit investments	460			407			267			675			1,126			13		%	(59	)	%	1,809			4,712			(62	)	%
Travel and entertainment	3,652			2,849			2,906			2,712			4,340			28		%	(16	)	%	12,119			16,442			(26	)	%
Employee training and dues	1,430			1,003			1,251			1,457			1,908			43		%	(25	)	%	5,141			7,218			(29	)	%
Customer relations (c)	2,794			3,165			1,540			1,599			1,834			(12	)	%	52		%	9,098			5,583			63		%
Miscellaneous loan costs	1,227			1,017			857			1,027			1,012			21		%	21		%	4,128			3,732			11		%
Supplies	2,104			1,668			1,342			1,804			1,459			26		%	44		%	6,918			6,917			*
Other real estate owned ("OREO")	1,478			342			25			(366		)	456			NM			NM			1,479			2,630			(44	)	%
Other insurance and taxes	2,515			2,475			2,495			2,694			1,506			2		%	67		%	10,179			9,684			5		%
Non-service components of net periodic pension and post retirement cost	327			986			559			432			1,632			(67	)	%	(80	)	%	2,304			5,251			(56	)	%
Repurchase and foreclosure provision (d)	—			(22		)	(530		)	(455		)	(153		)	NM			NM			(1,007		)	(1,039		)	3		%
Other (e)	22,870			14,231			26,199			7,739			8,696			61		%	NM			71,039			73,223			(3	)	%
Total	$	38,463		$	39,655		$	28,681		$	19,331		$	23,851		(3	)	%	61		%	$	126,130		$	134,997		(7	)	%

NM - Not meaningful

* Amount is less than one percent.


(a)	Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense.


(b)	4Q19, 3Q19 and 2Q19 increase due in large part to higher fees from derivative sales in the Regional Banking segment; 4Q19 and 3Q19 include an increase in collections from CBF loans charged off prior to acquisition; 3Q19 includes $1.0 million of gains on the sales of buildings; 4Q18 includes a $1.8 million negative valuation adjustment on HFS consumer loans included in the Non-Strategic segment.


(c)	3Q19 increase driven by higher development costs.

(d) Expense reversals driven by the settlements/recoveries of certain repurchase claims.


(e)	Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 9 for additional information about variability in quarterly balances; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.

ACQUISITION EXPENSE

Quarterly, Unaudited



IBKC ACQUISITION EXPENSE	4Q19

(Thousands)
Legal and professional fees (a)	$	8,228
Employee compensation, incentives, and benefits (b)	3,079
Miscellaneous expense (e)	64
Total IBKC acquisition expense	$	11,371



														4Q19 Changes vs.
OTHER ACQUISITION EXPENSE	4Q19			3Q19			2Q19		1Q19		4Q18			3Q19			4Q18

(Thousands)
Legal and professional fees (a)	$	1,494		$	3,507		$	4,478	$	1,867	$	3,122		(57	)	%	(52	)	%
Employee compensation, incentives, and benefits (b)	1,035			1,473			1,472		1,517		2,409			(30	)	%	(57	)	%
Occupancy (c)	(94		)	(76		)	1,505		118		2,915			(24	)	%	NM
Contract employment and outsourcing (d)	35			223			17		—		(20		)	(84	)	%	NM
Miscellaneous expense (e)	217			1,022			79		1,069		1,130			(79	)	%	(81	)	%
All other expense (f)	1,638			2,840			1,096		1,089		2,040			(42	)	%	(20	)	%
Total other acquisition expense	$	4,325		$	8,989		$	8,647	$	5,660	$	11,596		(52	)	%	(63	)	%

NM - Not meaningful


(a)	Primarily comprised of fees for legal, accounting, and merger consultants.


(b)	Primarily comprised of fees for severance and retention.


(c)	Primarily relates to fees associated with lease exit accruals.


(d)	Primarily relates to fees for temporary assistance for merger and integration activities.


(e)	Consists of fees for operations services, communications and courier, equipment rentals, deprecation and maintenance, supplies, travel and entertainment, computer software, and advertising and public relations.


(f)	Primarily relates to contract termination charges, costs of shareholder matters and asset impairments related to integration, as well as other miscellaneous expenses.

RESTRUCTURING EXPENSE

Quarterly, Unaudited



											4Q19 Changes vs.
	4Q19			3Q19			2Q19		1Q19		3Q19

(Thousands)
Legal and professional fees	$	989		$	6,488		$	4,242	$	4,295	(85	)	%
Employee compensation, incentives, and benefits	259			1,182			2,557		6,505		(78	)	%
Occupancy	57			(128		)	72		817		NM
All other expense (a)	(148		)	300			11,797		535		NM
Total restructuring expense	$	1,157		$	7,842		$	18,668	$	12,152	(85	)	%

NM - Not meaningful


(a)	Primarily relates to costs associated with asset impairments.

REBRANDING EXPENSE

Quarterly, Unaudited



							4Q19 Changes vs.
	4Q19		3Q19		2Q19		3Q19

(Thousands)
Legal and professional fees	$	1,016	$	879	$	882	16		%
Advertising and public relations	6,360		663		423		NM
Supplies	862		105		325		NM
Miscellaneous expense	315		145		38		NM
All other expense (a)	561		1,322		7,406		(58	)	%
Total rebranding expense	$	9,114	$	3,114	$	9,074	NM

NM - Not meaningful


(a)	Primarily relates to costs associated with fixed asset impairments and technology-related expenses.

FHN CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited



																4Q19 Changes vs.
(Thousands)	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18

Assets:
Investment securities	$	4,455,403		$	4,425,845		$	4,425,609		$	4,626,322		$	4,636,470		1		%	(4	)	%
Loans held-for-sale (a)	593,790			554,843			447,106			594,662			679,149			7		%	(13	)	%
Loans, net of unearned income	31,061,111			31,260,833			29,712,810			27,990,048			27,535,532			(1	)	%	13		%
Federal funds sold	46,536			48,747			50,705			167,602			237,591			(5	)	%	(80	)	%
Securities purchased under agreements to resell	586,629			697,214			602,919			474,679			386,443			(16	)	%	52		%
Interest-bearing cash (b)	482,405			364,412			593,180			1,013,254			1,277,611			32		%	(62	)	%
Trading securities	1,346,207			1,395,043			1,668,942			1,681,727			1,448,168			(4	)	%	(7	)	%
Total earning assets	38,572,081			38,746,937			37,501,271			36,548,294			36,200,964			*			7		%
Cash and due from banks	633,728			749,719			596,081			570,589			781,291			(15	)	%	(19	)	%
Fixed income receivables (c)	40,114			209,732			147,574			46,782			38,861			(81	)	%	3		%
Goodwill	1,432,787			1,432,787			1,432,787			1,432,787			1,432,787			*			*
Other intangible assets, net	130,200			136,406			142,612			148,818			155,034			(5	)	%	(16	)	%
Premises and equipment, net	455,006			451,600			454,271			484,494			494,041			1		%	(8	)	%
OREO	17,838			20,181			19,286			23,396			25,290			(12	)	%	(29	)	%
Allowance for loan losses	(200,307		)	(193,149		)	(192,749		)	(184,911		)	(180,424		)	4		%	11		%
Derivative assets	183,115			250,786			185,521			118,128			81,475			(27	)	%	NM
Other assets (d)	2,046,338			1,912,685			1,885,116			1,910,626			1,802,939			7		%	14		%
Total assets	$	43,310,900		$	43,717,684		$	42,171,770		$	41,099,003		$	40,832,258		(1	)	%	6		%

Liabilities and Equity:
Deposits:
Consumer interest	$	13,866,920		$	13,670,204		$	13,705,969		$	13,707,310		$	13,327,104		1		%	4		%
Commercial interest	6,153,075			6,211,539			6,660,056			6,729,999			6,172,159			(1	)	%	*
Market-indexed (e)	3,980,589			3,794,105			3,855,545			4,062,531			5,042,412			5		%	(21	)	%
Total interest-bearing deposits	24,000,584			23,675,848			24,221,570			24,499,840			24,541,675			1		%	(2	)	%
Noninterest-bearing deposits	8,428,951			8,268,812			8,086,748			7,963,048			8,141,317			2		%	4		%
Total deposits	32,429,535			31,944,660			32,308,318			32,462,888			32,682,992			2		%	(1	)	%
Federal funds purchased	548,344			936,837			666,007			339,360			256,567			(41	)	%	NM
Securities sold under agreements to repurchase	716,925			735,226			764,308			745,788			762,592			(2	)	%	(6	)	%
Trading liabilities	505,581			719,777			558,347			429,669			335,380			(30	)	%	51		%
Other short-term borrowings (f)	2,253,045			2,276,139			865,347			140,832			114,764			(1	)	%	NM
Term borrowings (g)	791,368			1,195,096			1,186,646			1,177,926			1,170,963			(34	)	%	(32	)	%
Fixed income payables (c)	49,535			66,842			66,369			100,290			9,572			(26	)	%	NM
Derivative liabilities	67,480			83,530			88,485			107,123			133,713			(19	)	%	(50	)	%
Other liabilities (d)	873,079			763,534			741,862			748,606			580,335			14		%	50		%
Total liabilities	38,234,892			38,721,641			37,245,689			36,252,482			36,046,878			(1	)	%	6		%
Equity:
Common stock	194,668			194,487			195,299			197,101			199,108			*			(2	)	%
Capital surplus	2,931,451			2,925,309			2,941,696			2,983,948			3,029,425			*			(3	)	%
Undivided profits	1,798,442			1,725,846			1,660,520			1,595,568			1,542,408			4		%	17		%
Accumulated other comprehensive loss, net	(239,608		)	(240,654		)	(262,489		)	(321,151		)	(376,616		)	*			(36	)	%
Preferred stock	95,624			95,624			95,624			95,624			95,624			*			*
Noncontrolling interest (h)	295,431			295,431			295,431			295,431			295,431			*			*
Total equity	5,076,008			4,996,043			4,926,081			4,846,521			4,785,380			2		%	6		%
Total liabilities and equity	$	43,310,900		$	43,717,684		$	42,171,770		$	41,099,003		$	40,832,258		(1	)	%	6		%

NM - Not meaningful

*Amount is less than one percent.


(a)	4Q19 includes $493.5 million of SBA and USDA loans, $95.1 million of mortgage loans, and $5.2 million of other consumer loans.


(b)	Includes excess balances held at Fed.


(c)	Period-end balances fluctuate based on the level of pending unsettled trades.


(d)	1Q19 increase largely driven by the adoption of ASU 2016-02, "Leases" which resulted in approximately $180 million of lease assets and approximately $200 million of lease liabilities being added to the balance sheet.


(e)	Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.


(f)	Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.


(g)	In 4Q19 $400 million of First Horizon Bank senior capital notes matured.


(h)	Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly/Annually, Unaudited



																4Q19 Changes vs.							Twelve Months Ended						2019 vs.
(Thousands)	4Q19			3Q19			2Q19			1Q19			4Q18				3Q19			4Q18			2019			2018				2018

Assets:
Earning assets:
Loans, net of unearned income:
Commercial, financial, and industrial (C&I) (a)	$	19,739,937		$	18,965,829		$	17,952,866		$	16,428,088		$	15,952,608			4		%	24		%	$	18,282,655		$	15,872,929			15		%
Commercial real estate (a)	4,263,597			4,269,425			3,910,466			3,959,592			4,170,186				*			2		%	4,102,065			4,206,206				(2	)	%
Consumer real estate	6,016,435			6,094,274			6,109,805			6,194,147			6,274,799				(1	)	%	(4	)	%	6,103,091			6,330,273				(4	)	%
Permanent mortgage	177,699			189,214			200,234			216,037			228,184				(6	)	%	(22	)	%	195,735			251,785				(22	)	%
Credit card and other	508,651			497,646			498,790			515,436			528,866				2		%	(4	)	%	505,092			552,635				(9	)	%
Total loans, net of unearned income (b)	30,706,319			30,016,388			28,672,161			27,313,300			27,154,643				2		%	13		%	29,188,638			27,213,828				7		%
Loans held-for-sale (c)	581,810			455,239			606,685			670,401			714,388				28		%	(19	)	%	577,953			723,996				(20	)	%
Investment securities:
U.S. treasuries	100			100			99			99			98				*			2		%	99			98				1		%
U.S. government agencies	4,327,651			4,289,719			4,461,712			4,494,814			4,489,625				1		%	(4	)	%	4,392,732			4,644,746				(5	)	%
States and municipalities	54,146			49,025			41,911			33,400			27,573				10		%	96		%	44,690			10,979				NM
Corporate bonds	50,493			50,414			64,720			65,194			65,033				*			(22	)	%	57,645			65,471				(12	)	%
Other	15,933			18,837			14,609			10,249			11,421				(15	)	%	40		%	14,933			7,017				NM
Total investment securities	4,448,323			4,408,095			4,583,051			4,603,756			4,593,750				1		%	(3	)	%	4,510,099			4,728,311				(5	)	%
Trading securities	1,263,633			1,391,405			1,564,201			1,443,969			1,634,726				(9	)	%	(23	)	%	1,415,242			1,603,767				(12	)	%
Other earning assets:
Federal funds sold	9,700			21,225			47,664			113,043			43,752				(54	)	%	(78	)	%	47,552			37,587				27		%
Securities purchased under agreements to resell	645,979			550,641			593,412			428,687			609,891				17		%	6		%	555,264			745,519				(26	)	%
Interest-bearing cash (d)	586,495			545,784			648,927			1,717,696			1,073,540				7		%	(45	)	%	870,725			623,583				40		%
Total other earning assets	1,242,174			1,117,650			1,290,003			2,259,426			1,727,183				11		%	(28	)	%	1,473,541			1,406,689				5		%
Total earning assets	38,242,259			37,388,777			36,716,101			36,290,852			35,824,690				2		%	7		%	37,165,473			35,676,591				4		%
Allowance for loan losses	(195,863		)	(196,586		)	(188,243		)	(182,332		)	(186,978		)		*			5		%	(190,809		)	(187,700		)		2		%
Cash and due from banks	609,750			596,323			590,622			610,470			615,199				2		%	(1	)	%	601,774			585,397				3		%
Fixed income receivables	75,917			75,938			64,958			55,393			56,519				*			34		%	68,129			55,930				22		%
Premises and equipment, net	450,950			451,567			478,607			485,462			499,867				*			(10	)	%	466,511			521,762				(11	)	%
Derivative assets	202,624			160,341			83,050			55,288			38,449				26		%	NM			125,825			61,873				NM
Other assets (e)	3,500,153			3,464,541			3,497,912			3,568,059			3,454,782				1		%	1		%	3,507,361			3,511,606				*
Total assets	$	42,885,790		$	41,940,901		$	41,243,007		$	40,883,192		$	40,302,528			2		%	6		%	$	41,744,264		$	40,225,459			4		%

Liabilities and equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	$	13,718,820		$	13,670,745		$	13,597,195		$	13,390,692		$	12,965,734			*			6		%	$	13,595,470		$	12,700,135			7		%
Commercial interest	6,145,681			6,321,835			6,599,793			6,577,476			5,900,136				(3	)	%	4		%	6,409,769			5,660,480				13		%
Market-indexed (f)	4,370,025			4,143,012			3,818,949			4,734,295			4,947,192				5		%	(12	)	%	4,265,234			4,541,835				(6	)	%
Total interest-bearing deposits	24,234,526			24,135,592			24,015,937			24,702,463			23,813,062				*			2		%	24,270,473			22,902,450				6		%
Federal funds purchased	1,163,701			886,445			519,497			370,868			334,036				31		%	NM			737,715			405,110				82		%
Securities sold under agreements to repurchase	701,213			722,815			691,490			688,765			710,898				(3	)	%	(1	)	%	701,164			713,841				(2	)	%
Trading liabilities	585,889			501,203			548,653			375,169			543,696				17		%	8		%	503,302			682,943				(26	)	%
Other short-term borrowings (g)	844,558			535,585			650,387			114,474			244,413				58		%	NM			538,249			1,046,585				(49	)	%
Term borrowings (h)	928,214			1,185,853			1,183,205			1,172,618			1,172,405				(22	)	%	(21	)	%	1,116,990			1,211,928				(8	)	%
Total interest-bearing liabilities	28,458,101			27,967,493			27,609,169			27,424,357			26,818,510				2		%	6		%	27,867,893			26,962,857				3		%
Noninterest-bearing deposits	8,542,521			8,235,806			7,947,607			7,795,015			8,034,692				4		%	6		%	8,132,575			8,000,642				2		%
Fixed income payables	34,510			33,059			25,579			21,978			19,858				4		%	74		%	28,827			20,172				43		%
Derivative liabilities	59,114			19,632			61,715			94,943			147,075				NM			(60	)	%	58,645			109,362				(46	)	%
Other liabilities (e)	751,676			722,570			729,776			737,664			551,695				4		%	36		%	735,425			514,897				43		%
Total liabilities	37,845,922			36,978,560			36,373,846			36,073,957			35,571,830				2		%	6		%	36,823,365			35,607,930				3		%
Equity:
Common stock	194,574			194,930			196,319			198,460			201,006				*			(3	)	%	196,057			202,884				(3	)	%
Capital surplus	2,928,463			2,934,276			2,964,824			3,015,017			3,068,536				*			(5	)	%	2,960,336			3,112,452				(5	)	%
Undivided profits	1,766,211			1,695,417			1,629,474			1,572,177			1,510,503				4		%	17		%	1,666,432			1,317,789				26		%
Accumulated other comprehensive loss, net	(240,435		)	(253,337		)	(312,511		)	(367,474		)	(440,402		)		(5	)	%	45		%	(292,981		)	(406,651		)		(28	)	%
Preferred stock	95,624			95,624			95,624			95,624			95,624				*			*			95,624			95,624				*
Noncontrolling interest (i)	295,431			295,431			295,431			295,431			295,431				*			*			295,431			295,431				*
Total equity	5,039,868			4,962,341			4,869,161			4,809,235			4,730,698				2		%	7		%	4,920,899			4,617,529				7		%
Total liabilities and equity	$	42,885,790		$	41,940,901		$	41,243,007		$	40,883,192		$	40,302,528			2		%	6		%	$	41,744,264		$	40,225,459			4		%

NM - Not meaningful

*Amount is less than one percent.


(a)	In 3Q19, FHN prospectively reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses is immaterial.

(b) Includes loans on nonaccrual status.


(c)	4Q19 includes $478.8 million of SBA and USDA loans, $97.7 million of mortgage loans, and $5.3 million of other consumer loans.


(d)	Includes excess balances held at Fed.


(e)	1Q19 increase largely driven by the adoption of ASU 2016-02, "Leases" which resulted in ~ $180 million and $200 million of lease assets and lease liabilities, respectively, being added to the balance sheet.


(f)	Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.


(g)	Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.


(h)	In 4Q19 $400 million of First Horizon Bank senior capital notes matured.


(i)	Consists of preferred stock of subsidiaries.

FHN CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited



																4Q19 Changes vs.
(Thousands)	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18

Interest Income:
Loans, net of unearned income (b)	$	356,176		$	357,724		$	354,067		$	334,167		$	333,935		*			7		%
Loans held-for-sale	7,053			6,069			8,128			9,877			11,759			16		%	(40	)	%
Investment securities:
U.S. government agencies	26,500			26,322			29,075			30,107			30,744			1		%	(14	)	%
States and municipalities	478			431			347			362			300			11		%	59		%
Corporate bonds	595			593			713			712			716			*			(17	)	%
Other	1,352			1,634			1,278			895			955			(17	)	%	42		%
Total investment securities	28,925			28,980			31,413			32,076			32,715			*			(12	)	%
Trading securities	9,507			10,645			13,332			13,712			15,533			(11	)	%	(39	)	%
Other earning assets:
Federal funds sold	51			141			326			733			304			(64	)	%	(83	)	%
Securities purchased under agreements to resell	2,467			2,800			3,301			2,336			3,197			(12	)	%	(23	)	%
Interest-bearing cash	2,359			2,700			3,689			10,209			5,884			(13	)	%	(60	)	%
Total other earning assets	4,877			5,641			7,316			13,278			9,385			(14	)	%	(48	)	%
Interest income	$	406,538		$	409,059		$	414,256		$	403,110		$	403,327		(1	)	%	1		%

Interest Expense:
Interest-bearing deposits:
Consumer interest	$	22,957		$	26,670		$	25,666		$	24,641		$	21,607		(14	)	%	6		%
Commercial interest	24,366			28,112			29,927			28,153			22,706			(13	)	%	7		%
Market-indexed (c)	20,090			23,809			23,409			29,416			29,366			(16	)	%	(32	)	%
Total interest-bearing deposits	67,413			78,591			79,002			82,210			73,679			(14	)	%	(9	)	%
Federal funds purchased	5,026			4,898			3,142			2,287			1,933			3		%	NM
Securities sold under agreements to repurchase	2,843			3,301			3,580			3,496			3,329			(14	)	%	(15	)	%
Trading liabilities	2,987			2,943			3,756			2,816			4,320			1		%	(31	)	%
Other short-term borrowings	3,989			3,333			4,316			961			1,571			20		%	NM
Term borrowings (d)	10,491			13,752			14,683			14,337			13,842			(24	)	%	(24	)	%
Interest expense	92,749			106,818			108,479			106,107			98,674			(13	)	%	(6	)	%
Net interest income - tax equivalent basis	313,789			302,241			305,777			297,003			304,653			4		%	3		%
Fully taxable equivalent adjustment	(2,396		)	(1,565		)	(2,167		)	(2,495		)	(2,141		)	(53	)	%	(12	)	%
Net interest income	$	311,393		$	300,676		$	303,610		$	294,508		$	302,512		4		%	3		%

NM - Not meaningful

*Amount is less than one percent.


(a)	Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 21 percent and, where applicable, state income taxes.


(b)	Includes interest on loans in nonaccrual status.


(c)	Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.


(d)	In 4Q19 $400 million of First Horizon Bank senior capital notes matured.

FHN CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES

Quarterly, Unaudited



	4Q19		3Q19		2Q19		1Q19		4Q18

Assets:
Earning assets (a)
Loans, net of unearned income (b)
Commercial loans	4.63	%	4.78	%	5.05	%	5.08	%	5.00	%
Consumer loans	4.51		4.55		4.65		4.59		4.54
Total loans, net of unearned income (c)	4.60		4.73		4.95		4.96		4.88
Loans held-for-sale	4.85		5.33		5.36		5.89		6.58
Investment securities:
U.S. government agencies	2.45		2.45		2.61		2.68		2.74
States and municipalities	3.53		3.51		3.31		4.33		4.36
Corporate bonds	4.71		4.71		4.41		4.37		4.40
Other	33.73		34.52		34.73		34.56		33.16
Total investment securities	2.60		2.63		2.74		2.79		2.85
Trading securities	3.01		3.06		3.41		3.80		3.80
Other earning assets:
Federal funds sold	2.10		2.64		2.74		2.63		2.76
Securities purchased under agreements to resell	1.52		2.02		2.23		2.21		2.08
Interest-bearing cash	1.60		1.96		2.28		2.41		2.17
Total other earning assets	1.56		2.00		2.27		2.38		2.16
Interest income/total earning assets	4.22	%	4.35	%	4.52	%	4.49	%	4.47	%
Liabilities:
Interest-bearing liabilities:
Interest-bearing deposits:
Consumer interest	0.66	%	0.77	%	0.76	%	0.75	%	0.66	%
Commercial interest	1.57		1.76		1.82		1.74		1.53
Market-indexed (d)	1.82		2.28		2.46		2.52		2.35
Total interest-bearing deposits	1.10		1.29		1.32		1.35		1.23
Federal funds purchased	1.71		2.19		2.43		2.50		2.30
Securities sold under agreements to repurchase	1.61		1.81		2.08		2.06		1.86
Trading liabilities	2.02		2.33		2.75		3.04		3.15
Other short-term borrowings	1.87		2.47		2.66		3.40		2.55
Term borrowings (e)	4.52		4.64		4.96		4.89		4.72
Interest expense/total interest-bearing liabilities	1.29		1.52		1.58		1.57		1.46
Net interest spread	2.93	%	2.83	%	2.94	%	2.92	%	3.01	%
Effect of interest-free sources used to fund earning assets	0.33		0.38		0.40		0.39		0.37
Net interest margin	3.26	%	3.21	%	3.34	%	3.31	%	3.38	%

Total loan yield	4.60	%	4.73	%	4.95	%	4.96	%	4.88	%
Total deposit cost	0.82	%	0.96	%	0.99	%	1.03	%	0.92	%

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 21 percent and, where applicable, state income taxes.


(a)	Earning assets yields are expressed net of unearned income.


(b)	Includes loan fees and cash basis interest income.


(c)	Includes loans on nonaccrual status.


(d)	Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.


(e)	Rates are expressed net of unamortized debenture cost for term borrowings; In 4Q19 $400 million of First Horizon Bank senior capital notes matured.

FHN CAPITAL HIGHLIGHTS

Quarterly, Unaudited



																4Q19 Changes vs.
(Dollars and shares in thousands)	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19		4Q18

Common equity tier 1 capital (a) (b)	$	3,408,937		$	3,326,059		$	3,270,484		$	3,239,249		$	3,223,702		2	%	6		%
Tier 1 capital (a) (b)	3,760,431			3,679,158			3,620,001			3,583,577			3,565,373			2	%	5		%
Total capital (a)	4,154,886			4,065,306			4,009,116			3,963,901			3,940,117			2	%	5		%

Risk-weighted assets (“RWA”) (a) (b)	37,046,770			36,913,347			35,341,740			33,656,950			33,002,595			*		12		%
Average assets for leverage (a) (b)	41,583,447			40,660,442			40,022,187			39,717,387			39,221,755			2	%	6		%

Common equity tier 1 ratio (a) (b)	9.20		%	9.01		%	9.25		%	9.62		%	9.77		%
Tier 1 ratio (a) (b)	10.15		%	9.97		%	10.24		%	10.65		%	10.80		%
Total capital ratio (a)	11.22		%	11.01		%	11.34		%	11.78		%	11.94		%
Leverage ratio (a) (b)	9.04		%	9.05		%	9.04		%	9.02		%	9.09		%

Total equity to total assets	11.72		%	11.43		%	11.68		%	11.79		%	11.72		%
Tangible common equity/tangible assets (“TCE/TA”) (c)	7.48		%	7.20		%	7.29		%	7.27		%	7.15		%
Period-end shares outstanding (d)	311,469			311,180			312,478			315,361			318,573			*		(2	)	%
Cash dividends declared per common share	$	0.14		$	0.14		$	0.14		$	0.14		$	0.12		*		17		%
Book value per common share	$	15.04		$	14.80		$	14.51		$	14.13		$	13.79
Tangible book value per common share (c)	$	10.02		$	9.76		$	9.47		$	9.11		$	8.81
Market capitalization (millions)	$	5,157.9		$	5,041.1		$	4,665.3		$	4,408.7		$	4,192.4

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

* Amount is less than one percent.


(a)	Current quarter is an estimate.


(b)	See Glossary of Terms for definition.


(c)	TCE/TA and Tangible book value per common share are non-GAAP measures and are reconciled to Total equity to total assets (GAAP) and to Book value per common share (GAAP), respectively, in the Non-GAAP to GAAP reconciliation on page 23 of this financial supplement.


(d)	Decreases largely attributable to shares repurchased under share repurchase programs.

FHN BUSINESS SEGMENT HIGHLIGHTS

Quarterly/Annually, Unaudited



																4Q19 Changes vs.						Twelve Months Ended						2019 vs.
(Thousands)	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18			2019			2018			2018

Regional Banking
Net interest income	$	310,696		$	302,370		$	297,339		$	285,913		$	298,288		3		%	4		%	$	1,196,318		$	1,197,471			*
Noninterest income (a)	89,553			85,776			81,475			73,030			70,003			4		%	28		%	329,834			311,763				6		%
Total revenues	400,249			388,146			378,814			358,943			368,291			3		%	9		%	1,526,152			1,509,234				1		%
Provision for loan losses	14,369			20,472			17,775			13,443			8,488			(30	)	%	69		%	66,059			24,643				NM
Noninterest expense	202,967			193,250			193,294			199,522			206,001			5		%	(1	)	%	789,033			826,262				(5	)	%
Income before income taxes	182,913			174,424			167,745			145,978			153,802			5		%	19		%	671,060			658,329				2		%
Provision for income taxes	43,048			41,752			39,502			33,846			36,077			3		%	19		%	158,148			154,659				2		%
Net income	$	139,865		$	132,672		$	128,243		$	112,132		$	117,725		5		%	19		%	$	512,912		$	503,670			2		%

Fixed Income
Net interest income	$	7,233		$	5,309		$	6,171		$	7,331		$	9,011		36		%	(20	)	%	$	26,044		$	35,753			(27	)	%
Noninterest income	81,185			77,809			65,622			53,807			39,678			4		%	NM			278,423			164,769				69		%
Total revenues	88,418			83,118			71,793			61,138			48,689			6		%	82		%	304,467			200,522				52		%
Noninterest expense (b)	62,329			67,787			55,770			50,774			46,516			(8	)	%	34		%	236,660			189,373				25		%
Income before income taxes	26,089			15,331			16,023			10,364			2,173			70		%	NM			67,807			11,149				NM
Provision/(benefit) for income taxes	6,303			3,656			3,781			2,397			408			72		%	NM			16,137			2,097				NM
Net income	$	19,786		$	11,675		$	12,242		$	7,967		$	1,765		69		%	NM			$	51,670		$	9,052			NM

Corporate
Net interest income/(expense)	$	(12,712	)	$	(13,225	)	$	(7,034	)	$	(7,803	)	$	(15,356	)	4		%	17		%	$	(40,774	)	$	(64,191	)		36		%
Noninterest income (c)	11,246			7,359			9,400			13,352			(1,411		)	53		%	NM			41,357			239,263				(83	)	%
Total revenues	(1,466		)	(5,866		)	2,366			5,549			(16,767		)	75		%	91		%	583			175,072				NM
Noninterest expense (d)	57,816			41,993			55,500			40,374			23,144			38		%	NM			195,683			177,923				10		%
Income/(loss) before income taxes	(59,282		)	(47,859		)	(53,134		)	(34,825		)	(39,911		)	(24	)	%	(49	)	%	(195,100		)	(2,851		)		NM
Provision/ (benefit) for income taxes	(15,243		)	(11,550		)	(13,159		)	(11,396		)	(14,608		)	(32	)	%	(4	)	%	(51,348		)	(10,889		)		NM
Net income/(loss)	$	(44,039	)	$	(36,309	)	$	(39,975	)	$	(23,429	)	$	(25,303	)	(21	)	%	(74	)	%	$	(143,752	)	$	8,038			NM

Non-Strategic
Net interest income	$	6,176		$	6,222		$	7,134		$	9,067		$	10,569		(1	)	%	(42	)	%	$	28,599		$	51,284			(44	)	%
Noninterest income (e)	1,323			791			1,496			856			2,004			67		%	(34	)	%	4,466			6,993				(36	)	%
Total revenues	7,499			7,013			8,630			9,923			12,573			7		%	(40	)	%	33,065			58,277				(43	)	%
Provision/(provision credit) for loan losses	(4,369		)	(5,472		)	(4,775		)	(4,443		)	(2,488		)	20		%	(76	)	%	(19,059		)	(17,643		)		(8	)	%
Noninterest expense (f)	4,335			4,642			(4,170		)	5,420			6,271			(7	)	%	(31	)	%	10,227			28,438				(64	)	%
Income before income taxes	7,533			7,843			17,575			8,946			8,790			(4	)	%	(14	)	%	41,897			47,482				(12	)	%
Provision for income taxes	1,862			1,938			4,343			2,211			2,172			(4	)	%	(14	)	%	10,354			11,735				(12	)	%
Net income	$	5,671		$	5,905		$	13,232		$	6,735		$	6,618		(4	)	%	(14	)	%	$	31,543		$	35,747			(12	)	%

Total Consolidated
Net interest income	$	311,393		$	300,676		$	303,610		$	294,508		$	302,512		4		%	3		%	$	1,210,187		$	1,220,317			(1	)	%
Noninterest income	183,307			171,735			157,993			141,045			110,274			7		%	66		%	654,080			722,788				(10	)	%
Total revenues	494,700			472,411			461,603			435,553			412,786			5		%	20		%	1,864,267			1,943,105				(4	)	%
Provision/(provision credit) for loan losses	10,000			15,000			13,000			9,000			6,000			(33	)	%	67		%	47,000			7,000				NM
Noninterest expense	327,447			307,672			300,394			296,090			281,932			6		%	16		%	1,231,603			1,221,996				1		%
Income before income taxes	157,253			149,739			148,209			130,463			124,854			5		%	26		%	585,664			714,109				(18	)	%
Provision for income taxes	35,970			35,796			34,467			27,058			24,049			*			50		%	133,291			157,602				(15	)	%
Net income	$	121,283		$	113,943		$	113,742		$	103,405		$	100,805		6		%	20		%	$	452,373		$	556,507			(19	)	%

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

NM - Not meaningful

* Amount is less than one percent.


(a)	4Q18 includes an $8.7 million unfavorable adjustment related to the return of excess fees received on Capital Bank debit card transactions.


(b)	3Q19 includes a $7.5 million unfavorable adjustment associated with the net impact of the resolution of legal matters.


(c)	1Q19 and 4Q18 include $6.2 million and $(7.1) million of deferred compensation income driven by equity market valuations; 1Q19 includes a $1.8 million negative valuation adjustment on HFS consumer loans included in the Non-Strategic segment; 2018 includes a pretax gain of $212.9 from the sale of Visa Class B Shares.


(d)	Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 9 for additional information about variability in quarterly balances; 4Q19 includes $11.0 million of charitable contributions; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.


(e)	2Q19 and 2018 include $1.1 million and $3.8 million, respectively, of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.


(f)	2Q19 includes an $8.3 million expense reversal related to the resolution of legal matters.

FHN REGIONAL BANKING

Quarterly/Annually, Unaudited



												4Q19 Changes vs.						Twelve Months Ended				2019 vs.
	4Q19		3Q19		2Q19		1Q19		4Q18			3Q19			4Q18			2019		2018		2018

Income Statement (thousands)
Net interest income	$	310,696	$	302,370	$	297,339	$	285,913	$	298,288		3		%	4		%	$	1,196,318	$	1,197,471		*
Provision for loan losses	14,369		20,472		17,775		13,443		8,488			(30	)	%	69		%	66,059		24,643			NM
Noninterest income:
NSF / Overdraft fees (a)	13,323		13,699		12,347		11,579		14,128			(3	)	%	(6	)	%	50,948		52,629			(3	)	%
Cash management fees	9,201		9,561		8,026		8,857		9,073			(4	)	%	1		%	35,645		36,772			(3	)	%
Debit card income (b)	4,659		4,749		4,960		5,372		(3,142		)	(2	)	%	NM			19,740		21,472			(8	)	%
Other	4,456		4,574		5,275		4,195		3,554			(3	)	%	25		%	18,500		15,959			16		%
Total deposit transactions and cash management	31,639		32,583		30,608		30,003		23,613			(3	)	%	34		%	124,833		126,832			(2	)	%
Brokerage, management fees and commissions	14,558		14,156		14,118		12,630		13,377			3		%	9		%	55,462		54,799			1		%
Trust services and investment management	7,451		7,190		7,902		7,056		6,961			4		%	7		%	29,599		29,853			(1	)	%
Bankcard income	7,879		7,028		6,594		7,039		7,738			12		%	2		%	28,540		29,434			(3	)	%
Other service charges	5,692		5,650		5,460		3,711		3,255			1		%	75		%	20,513		14,843			38		%
Miscellaneous revenue (c)	22,334		19,169		16,793		12,591		15,059			17		%	48		%	70,887		56,002			27		%
Total noninterest income	89,553		85,776		81,475		73,030		70,003			4		%	28		%	329,834		311,763			6		%
Noninterest expense:
Employee compensation, incentives, and benefits	74,465		73,713		76,752		81,796		82,304			1		%	(10	)	%	306,726		326,885			(6	)	%
Other (d)	128,502		119,537		116,542		117,726		123,697			7		%	4		%	482,307		499,377			(3	)	%
Total noninterest expense	202,967		193,250		193,294		199,522		206,001			5		%	(1	)	%	789,033		826,262			(5	)	%
Income before income taxes	$	182,913	$	174,424	$	167,745	$	145,978	$	153,802		5		%	19		%	$	671,060	$	658,329		2		%
PPNR (e)	197,282		194,896		185,520		159,421		162,290			1		%	22		%	737,119		682,972			8		%

Balance Sheet (millions)
Average loans	$	29,722	$	28,958	$	27,533	$	26,107	$	25,877		3		%	15		%	$	28,092	$	25,785		9		%
Average other earning assets	53		47		47		39		41			13		%	29		%	47		51			(8	)	%
Total average earning assets	29,775		29,005		27,580		26,146		25,918			3		%	15		%	28,139		25,836			9		%
Total average deposits	30,413		30,044		29,954		29,590		28,316			1		%	7		%	30,003		27,604			9		%
Total period-end deposits	30,593		30,060		30,272		30,354		29,344			2		%	4		%	30,593		29,344			4		%
Total period-end assets	32,899		33,157		31,340		29,544		29,126			(1	)	%	13		%	32,899		29,126			13		%

Key Statistics
Return on average assets (quarters are annualized) (f)	1.71%		1.66%		1.70%		1.58%		1.64%									1.67%		1.78%
Return on allocated equity (f) (g)	18.16%		17.52%		17.38%		15.54%		15.86%									17.17%		16.76%
Fee income to total revenue (f)	22.37%		22.10%		21.51%		20.35%		19.01%									21.61%		20.66%
Efficiency ratio (f)	50.71%		49.79%		51.03%		55.59%		55.93%									51.70%		54.75%
Net interest margin (h)	4.17%		4.16%		4.35%		4.47%		4.60%									4.28%		4.67%
Net interest spread	3.77%		3.82%		3.99%		3.98%		4.04%									3.88%		4.07%
Loan average yield	4.50%		4.68%		4.88%		4.86%		4.78%									4.72%		4.63%
Deposit average rate	0.73%		0.86%		0.89%		0.88%		0.74%									0.84%		0.56%
Regional banking net charge-offs/(recoveries)	$	5,886	$	17,074	$	7,841	$	5,540	$	12,597		(66	)	%	(53	)	%	$	36,341	$	23,312		56		%
Financial center locations (i)	269		270		292		292		292			*			(8	)	%

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

NM - Not meaningful

* Amount is less than one percent


(a)	Variability is driven by changes in consumer behavior and seasonality.


(b)	4Q18 includes an $8.7 million unfavorable adjustment related to the return of excess fees received on Capital Bank debit card transactions.


(c)	4Q19, 3Q19 and 2Q19 increase due in large part to higher fees from derivative sales; 4Q19 and 3Q19 include an increase in collections from CBF loans charged off prior to acquisition.


(d)	4Q19 increase due in large part to higher strategic investments in technology and advertising.


(e)	Pre-provision net revenue is not a GAAP number but is used in regulatory stress test reporting. The presentation of PPNR in this Financial Supplement follows the regulatory definition.


(f)	See Glossary of Terms for definitions of Key Ratios.


(g)	Segment equity is allocated based on an internal allocation methodology.


(h)	Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent, and, where applicable, state income taxes.


(i)	3Q19 decrease driven by restructuring, repositioning, and efficiency initiatives.

FHN FIXED INCOME

Quarterly/Annually, Unaudited



																4Q19 Changes vs.						Twelve Months Ended						2019 vs.
	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18			2019			2018			2018

Income Statement (thousands)
Net interest income	$	7,233		$	5,309		$	6,171		$	7,331		$	9,011		36		%	(20	)	%	$	26,044		$	35,753			(27)	%
Noninterest income:
Fixed income product revenue	65,772			63,646			54,533			44,472			30,028			3		%	NM			228,423			132,283				73	%
Other	15,413			14,163			11,089			9,335			9,650			9		%	60		%	50,000			32,486				54	%
Total noninterest income	81,185			77,809			65,622			53,807			39,678			4		%	NM			278,423			164,769				69	%
Noninterest expense (a)	62,329			67,787			55,770			50,774			46,516			(8	)	%	34		%	236,660			189,373				25	%
Income before income taxes	$	26,089		$	15,331		$	16,023		$	10,364		$	2,173		70		%	NM			$	67,807		$	11,149			NM
Fixed income product average daily revenue	$	1,061		$	994		$	866		$	729		$	492		7		%	NM			$	914		$	531			72	%

Balance Sheet (millions)
Average trading inventory	$	1,263		$	1,390		$	1,563		$	1,443		$	1,633		(9	)	%	(23	)	%	$	1,414		$	1,602			(12)	%
Average loans held-for-sale	477			367			528			571			608			30		%	(22	)	%	485			563				(14)	%
Average other earning assets	829			709			670			491			675			17		%	23		%	676			807				(16)	%
Total average earning assets	2,569			2,466			2,761			2,505			2,916			4		%	(12	)	%	2,575			2,972				(13)	%
Total period-end assets	2,987			3,323			3,233			3,094			2,789			(10	)	%	7		%	2,987			2,789				7	%

Key Statistics
Return on average assets (b)	2.63		%	1.61		%	1.57		%	1.13		%	0.22		%							1.74		%	0.27		%
Return on allocated equity (b) (c)	39.58		%	23.30		%	24.29		%	16.20		%	3.38		%							25.88		%	4.29		%
Efficiency ratio (b)	70.49		%	81.56		%	77.68		%	83.05		%	95.54		%							77.73		%	94.44		%
Net interest margin (d)	1.15		%	0.88		%	0.92		%	1.19		%	1.26		%							1.04		%	1.23		%

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

NM - Not meaningful


(a)	3Q19 includes a $7.5 million unfavorable adjustment associated with the net impact of the resolution of legal matters.


(b)	See Glossary of Terms for definitions of Key Ratios.


(c)	Segment equity is allocated based on an internal allocation methodology.


(d)	Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent, and, where applicable, state income taxes.

FHN CORPORATE

Quarterly/Annually, Unaudited



																4Q19 Changes vs.						Twelve Months Ended						2019 vs.
	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18			2019			2018			2018

Income Statement (thousands)
Net interest income/(expense)	$	(12,712	)	$	(13,225	)	$	(7,034	)	$	(7,803	)	$	(15,356	)	4		%	17		%	$	(40,774	)	$	(64,191	)		36		%
Noninterest income excluding securities gains/(losses) (a)	11,249			7,262			9,351			13,321			(1,383		)	55		%	NM			41,183			26,315				57		%
Securities gains/(losses), net (b)	(3		)	97			49			31			(28		)	NM			89		%	174			212,948				NM
Noninterest expense (c)	57,816			41,993			55,500			40,374			23,144			38		%	NM			195,683			177,923				10		%
Income/(loss) before income taxes	$	(59,282	)	$	(47,859	)	$	(53,134	)	$	(34,825	)	$	(39,911	)	(24	)	%	(49	)	%	$	(195,100	)	$	(2,851	)		NM

Average Balance Sheet (millions)
Average investment securities	$	4,432		$	4,389		$	4,568		$	4,594		$	4,582		1		%	(3	)	%	$	4,495		$	4,721			(5	)	%
Total earning assets	$	4,980		$	4,916		$	5,295		$	6,463		$	5,732		1		%	(13	)	%	$	5,408		$	5,396			*

Deferred Compensation (thousands)
Other Income	$	3,339		$	471		$	1,938		$	5,474		$	(6,124	)	NM			NM			$	11,223		$	(3,224	)		NM
Employee compensation, incentives, and benefits	$	3,846		$	567		$	2,150		$	6,221		$	(6,983	)	NM			NM			$	12,784		$	(3,295	)		NM

Estimated effective duration of securities portfolio 3.0 years in 4Q19 compared to 2.4 years in 3Q19

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

NM - Not Meaningful

* Amount is less than one percent.


(a)	Variability in quarterly balances driven by fluctuations in deferred compensation income driven by equity market valuations; 4Q18 includes a $1.8 million negative valuation adjustment on HFS consumer loans included in the Non-Strategic segment; 3Q19 include $1.0 million, respectively, of gains on the sales of buildings.


(b)	2018 includes a pre-tax gain of $212.9 million from the sale of Visa Class B Shares.


(c)	Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 9 for additional information about variability in quarterly balances; 4Q19 includes $11.0 million of charitable contributions; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.

FHN NON-STRATEGIC

Quarterly/Annually, Unaudited



																4Q19 Changes vs.						Twelve Months Ended						2019 vs.
	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19			4Q18			2019			2018			2018

Income Statement (thousands)
Net interest income	$	6,176		$	6,222		$	7,134		$	9,067		$	10,569		(1	)	%	(42	)	%	$	28,599		$	51,284		(44)	%
Provision/(provision credit) for loan losses	(4,369		)	(5,472		)	(4,775		)	(4,443		)	(2,488		)	20		%	(76	)	%	(19,059		)	(17,643		)	(8)	%
Noninterest income (a)	1,323			791			1,496			856			2,004			67		%	(34	)	%	4,466			6,993			(36)	%
Noninterest expense (b)	4,335			4,642			(4,170		)	5,420			6,271			(7	)	%	(31	)	%	10,227			28,438			(64)	%
Income before income taxes	$	7,533		$	7,843		$	17,575		$	8,946		$	8,790		(4	)	%	(14	)	%	$	41,897		$	47,482		(12)	%

Average Balance Sheet (millions)
Loans	$	852		$	935		$	1,011		$	1,087		$	1,161		(9	)	%	(27	)	%	$	971		$	1,325		(27)	%
Other assets	68			66			77			88			98			3		%	(31	)	%	74			146			(49)	%
Total assets	920			1,001			1,088			1,175			1,259			(8	)	%	(27	)	%	1,045			1,471			(29)	%

Key Statistics
Return on average assets (c)	2.44		%	2.34		%	4.88		%	2.32		%	2.09		%							3.02		%	2.43		%
Return on allocated equity (c) (d)	35.64		%	31.71		%	64.14		%	25.64		%	22.06		%							38.74		%	24.13		%
Fee income to total revenue (c)	17.64		%	11.28		%	17.33		%	8.63		%	15.94		%							13.51		%	12.00		%
Efficiency ratio (c)	57.81		%	66.19		%	NM			54.62		%	49.88		%							30.93		%	48.80		%
Net interest margin (e)	2.68		%	2.47		%	2.65		%	3.11		%	3.35		%							2.74		%	3.48		%
Net charge-offs/(recoveries)	$	(3,044	)	$	(2,474	)	$	(2,679	)	$	(1,027	)	$	(1,062	)	(23	)	%	NM			$	(9,224	)	$	(7,180	)	(28)	%

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

NM - Not Meaningful


(a)	2Q19 and 2018 include $1.1 million and $3.8 million, respectively, of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.

(b) 2Q19 includes an $8.3 million expense reversal related to the settlement of litigation matters.


(c)	See Glossary of Terms for definitions of Key Ratios.


(d)	Segment equity is allocated based on an internal allocation methodology.


(e)	Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent, and, where applicable, state income taxes.

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



																					4Q19 Changes vs.
(Dollars in thousands)	4Q19				3Q19				2Q19				1Q19				4Q18				3Q19	4Q18

Allowance for Loan Losses Walk-Forward
Beginning reserve	$	193,149			$	192,749			$	184,911			$	180,424			$	185,959			*	4%
Provision/(provision credit) for loan losses	10,000				15,000				13,000				9,000				6,000				(33)%	67%
Charge-offs	(11,646			)	(24,337			)	(12,223			)	(10,527			)	(17,824			)	52%	35%
Recoveries	8,804				9,737				7,061				6,014				6,289				(10)%	40%
Ending balance	$	200,307			$	193,149			$	192,749			$	184,911			$	180,424			4%	11%
Reserve for unfunded commitments	6,101				6,890				7,524				8,014				7,618				(11)%	(20)%
Total allowance for loan losses plus reserve for unfunded commitments	$	206,408			$	200,039			$	200,273			$	192,925			$	188,042			3%	10%

Allowance for Loan Losses (a)
Regional Banking	$	182,730			$	174,246			$	170,849			$	160,914			$	153,015			5%	19%
Non-Strategic	17,577				18,903				21,900				23,997				27,409				(7)%	(36)%
Total allowance for loan losses	$	200,307			$	193,149			$	192,749			$	184,911			$	180,424			4%	11%

Nonperforming Assets
Regional Banking
Nonperforming loans (b)	$	113,187			$	118,506			$	145,265			$	115,977			$	79,339			(4)%	43%
OREO	12,347				13,408				13,251				16,698				18,535				(8)%	(33)%
Total Regional Banking	$	125,534			$	131,914			$	158,516			$	132,675			$	97,874			(5)%	28%
Non-Strategic
Nonperforming loans	$	47,651			$	52,346			$	57,654			$	63,960			$	66,703			(9)%	(29)%
Nonperforming loans held-for-sale after fair value adjustments	4,047				4,199				4,514				5,219				5,328				(4)%	(24)%
OREO	3,313				4,408				3,342				3,978				3,852				(25)%	(14)%
Total Non-Strategic	$	55,011			$	60,953			$	65,510			$	73,157			$	75,883			(10)%	(28)%
Corporate
Nonperforming loans	$	1,327			$	1,643			$	1,667			$	1,687			$	1,707			(19)%	(22)%
Total nonperforming assets	$	181,872			$	194,510			$	225,693			$	207,519			$	175,464			(6)%	4%

Net Charge-Offs
Regional Banking	$	5,886			$	17,074			$	7,841			$	5,540			$	12,597			(66)%	(53)%
Non-Strategic	(3,044			)	(2,474			)	(2,679			)	(1,027			)	(1,062			)	(23)%	NM
Total net charge-offs/(recoveries)	$	2,842			$	14,600			$	5,162			$	4,513			$	11,535			(81)%	(75)%

Consolidated Key Ratios (c)
30+ Delinq. % (d)	0.19		%		0.23		%		0.20		%		0.23		%		0.27		%
NPL % (e)	0.52				0.55				0.69				0.65				0.54
NPA %	0.57				0.61				0.74				0.72				0.62
Net charge-offs % (f)	0.04				0.19				0.07				0.07				0.17
Allowance / loans %	0.64				0.62				0.65				0.66				0.66
Allowance / NPL	1.24		x		1.12		x		0.94		x		1.02		x		1.22		x
Allowance / NPA	1.13		x		1.01		x		0.87		x		0.91		x		1.06		x
Allowance / net charge-offs	17.76		x		3.33		x		9.31		x		10.10		x		3.94		x

Other
Loans past due 90 days or more and still accruing (g)	$	28,343			$	27,182			$	28,663			$	30,896			$	39,992			4%	(29)%
Guaranteed portion (g)	6,417				6,028				5,628				5,725				7,237				6%	(11)%
Period-end loans, net of unearned income (millions)	31,061				31,261				29,713				27,990				27,536				(1)%	13%
30+ delinquencies (thousands)	$	57,911			$	70,675			$	58,861			$	63,693			$	75,164			(18)%	(23)%

NM - Not meaningful

* Amount is less than one percent.


(a)	In 2Q19, the HBF portfolio was retrospectively reclassed from the Regional Banking segment to the Non-Strategic segment.


(b)	3Q19 decrease in nonperforming loans was primarily driven by one mortgage warehouse lending relationship that converted to the underlying collateral.


(c)	See Glossary of Terms for definitions of Consolidated Key Ratios.


(d)	30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.


(e)	2Q19 increase in NPLs as a percentage of total loans was primarily driven by one credit.


(f)	3Q19 increase in charge-offs as a percentage of loans was primarily driven by two credits.


(g)	Includes loans held-for-sale.

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited



																4Q19 Changes vs.
	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19	4Q18

Key Portfolio Details
C&I (a)
Period-end loans ($ millions)	$	20,051		$	20,294		$	19,054		$	17,176		$	16,515		(1)%	21%
30+ Delinq. % (b) (c)	0.05		%	0.11		%	0.05		%	0.07		%	0.06		%
NPL % (d)	0.37			0.38			0.56			0.44			0.24
Charge-offs % (qtr. annualized) (e)	0.07			0.32			0.14			0.06			0.20
Allowance / loans %	0.61		%	0.56		%	0.61		%	0.60		%	0.60		%
Allowance / net charge-offs	9.25		x	1.87		x	4.77		x	11.26		x	3.06		x

Commercial Real Estate (a)
Period-end loans ($ millions)	$	4,337		$	4,229		$	3,861		$	3,947		$	4,031		3%	8%
30+ Delinq. % (b)	0.02		%	0.04		%	0.07		%	0.04		%	0.06		%
NPL %	0.04			0.05			0.07			0.07			0.07
Charge-offs % (qtr. annualized)	NM			0.02			0.02			0.04			0.05
Allowance / loans %	0.83		%	0.84		%	0.85		%	0.87		%	0.78		%
Allowance / net charge-offs	NM			47.70		x	39.25		x	22.50		x	15.45		x

Consumer Real Estate
Period-end loans ($ millions)	$	6,007		$	6,063		$	6,110		$	6,152		$	6,250		(1)%	(4)%
30+ Delinq. % (b)	0.61		%	0.59		%	0.62		%	0.66		%	0.74		%
NPL %	1.19			1.31			1.25			1.34			1.32
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	0.33		%	0.36		%	0.37		%	0.39		%	0.42		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	170		$	182		$	193		$	209		$	222		(7)%	(23)%
30+ Delinq. % (b) (f)	3.72		%	3.83		%	2.22		%	1.95		%	3.21		%
NPL %	8.44			7.83			9.28			10.01			9.76
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	5.18		%	4.84		%	4.49		%	4.82		%	4.95		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Credit Card and Other
Period-end loans ($ millions)	$	496		$	493		$	495		$	506		$	518		1%	(4)%
30+ Delinq. % (b)	0.93		%	0.94		%	1.06		%	1.20		%	1.63		%
NPL %	0.07			0.07			0.09			0.09			0.12
Charge-offs % (qtr. annualized)	2.29			2.10			2.17			2.44			3.32
Allowance / loans %	2.68		%	2.58		%	2.46		%	2.50		%	2.46		%
Allowance / net charge-offs	1.14		x	1.21		x	1.13		x	1.01		x	0.73		x

NM - Not meaningful


(a)	In 3Q19, FHN prospectively reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses was immaterial.


(b)	30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.


(c)	3Q19 increase in delinquencies as a percentages of total loans was primarily driven by one credit.


(d)	2Q19 increase in NPLs as a percentage of total loans was primarily driven by one credit; 1Q19 increase in NPLs as a percentages of total loans was primarily driven by three credits.


(e)	3Q19 charge-offs as a percentage of loans was primarily driven by two credits; 2Q19 charge-offs as a percentage of total loans was primarily driven by one credit; 4Q18 charge-offs as a percentage of loans was primarily driven by two credits.


(f)	3Q19 increase in delinquencies as a percentage of total loans was primarily driven by two credits.

FHN ASSET QUALITY: REGIONAL BANKING

Quarterly, Unaudited



																4Q19 Changes vs.
	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19	4Q18

Total Regional Banking (a)
Period-end loans ($ millions)	$	30,213		$	30,345		$	28,711		$	26,898		$	26,385		*	15%
30+ Delinq. % (c) (d)	0.14		%	0.18		%	0.15		%	0.17		%	0.19		%
NPL % (e)	0.37			0.39			0.51			0.43			0.30
Charge-offs % (qtr. annualized) (f)	0.08			0.23			0.11			0.09			0.19
Allowance / loans %	0.60		%	0.57		%	0.60		%	0.60		%	0.58		%
Allowance / net charge-offs	7.82		x	2.57		x	5.43		x	7.16		x	3.06		x

Key Portfolio Details
C&I (a) (b)
Period-end loans ($ millions)	$	19,721		$	19,962		$	18,710		$	16,812		$	16,149		(1)%	22%
30+ Delinq. % (c) (d)	0.05		%	0.11		%	0.05		%	0.06		%	0.06		%
NPL % (e)	0.38			0.37			0.56			0.43			0.23
Charge-offs % (qtr. annualized) (f)	0.07			0.33			0.14			0.06			0.21
Allowance / loans %	0.62		%	0.57		%	0.61		%	0.61		%	0.60		%
Allowance / net charge-offs	9.23		x	1.87		x	4.73		x	10.98		x	3.01		x

Commercial Real Estate (a) (b)
Period-end loans ($ millions)	$	4,292		$	4,172		$	3,787		$	3,867		$	3,955		3%	9%
30+ Delinq. % (c)	0.02		%	0.04		%	0.07		%	0.04		%	0.06		%
NPL %	0.04			0.05			0.07			0.07			0.08
Charge-offs % (qtr. annualized)	NM			0.02			0.02			0.04			0.05
Allowance / loans %	0.79		%	0.79		%	0.77		%	0.80		%	0.71		%
Allowance / net charge-offs	NM			43.95		x	34.79		x	20.16		x	13.63		x

Consumer Real Estate (a)
Period-end loans ($ millions)	$	5,735		$	5,759		$	5,773		$	5,780		$	5,845		*	(2)%
30+ Delinq. % (c)	0.50		%	0.48		%	0.50		%	0.52		%	0.58		%
NPL %	0.64			0.74			0.66			0.71			0.67
Charge-offs % (qtr. annualized)	NM			NM			NM			0.04			0.07
Allowance / loans %	0.23		%	0.26		%	0.25		%	0.26		%	0.25		%
Allowance / net charge-offs	NM			NM			NM			6.17		x	3.38		x

Credit Card, Permanent Mortgage, and Other
Period-end loans ($ millions)	$	465		$	452		$	441		$	439		$	436		3%	7%
30+ Delinq. % (c)	0.74		%	0.69		%	0.72		%	0.74		%	0.95		%
NPL %	0.05			0.05			0.06			0.08			0.09
Charge-offs % (qtr. annualized)	2.31			2.00			1.82			2.08			2.55
Allowance / loans %	2.87		%	2.82		%	2.76		%	2.87		%	2.90		%
Allowance / net charge-offs	1.23		x	1.41		x	1.52		x	1.38		x	1.13		x

ASSET QUALITY: CORPORATE

Permanent Mortgage
Period-end loans ($ millions)	$	31		$	34		$	35		$	38		$	39		(9)%	(21)%
30+ Delinq. % (c)	5.29		%	5.00		%	4.03		%	4.54		%	4.37		%
NPL %	4.22			4.90			4.79			4.49			4.35
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	NM			NM			NM			NM			NM
Allowance / net charge-offs	NM			NM			NM			NM			NM

NM - Not meaningful * Amount is less than one percent.


(a)	In 2Q19, the HBF portfolio was retrospectively reclassed from the Regional Banking segment to the Non-Strategic segment.


(b)	In 3Q19, FHN prospectively reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses was immaterial.


(c)	30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.


(d)	3Q19 increase in delinquencies as a percentage of total loans was primarily driven by one credit.


(e)	2Q19 increase in NPLs as a percentage of total loans was primarily driven by one credit; 1Q19 increase in NPLs as a percentage of total loans was primarily driven by three credits.


(f)	3Q19 charge-offs as a percentage of loans was primarily driven by two credits; 2Q19 charge-offs as a percentage of total loans was primarily driven by one credit; 4Q18 charge-offs as a percentage of loans was primarily driven by two credits.

FHN ASSET QUALITY: NON-STRATEGIC

Quarterly, Unaudited



																4Q19 Changes vs.
	4Q19			3Q19			2Q19			1Q19			4Q18			3Q19	4Q18

Total Non-Strategic (a)
Period-end loans ($ millions)	$	817		$	882		$	967		$	1,054		$	1,112		(7)%	(27)%
30+ Delinq. % (b)	1.72		%	1.67		%	1.42		%	1.63		%	2.15		%
NPL %	5.83			5.93			5.96			6.06			6.00
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	2.15		%	2.14		%	2.27		%	2.27		%	2.47		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Key Portfolio Details
Commercial (a)
Period-end loans ($ millions)	$	375		$	388		$	418		$	444		$	441		(3)%	(15)%
30+ Delinq. % (b)	—		%	—		%	—		%	0.38		%	0.39		%
NPL %	—			0.70			0.66			0.64			0.65
Charge-offs % (qtr. annualized)	—			—			0.02			NM			NM
Allowance / loans %	0.65		%	0.77		%	1.20		%	1.10		%	0.99		%
Allowance / net charge-offs	NM			NM			56.57		x	NM			NM

Consumer Real Estate (a)
Period-end loans ($ millions)	$	272		$	304		$	337		$	372		$	405		(11)%	(33)%
30+ Delinq. % (b)	3.01		%	2.62		%	2.60		%	2.77		%	3.07		%
NPL %	12.69			12.14			11.40			11.25			10.76
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	2.35		%	2.33		%	2.44		%	2.41		%	2.95		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Permanent Mortgage
Period-end loans ($ millions)	$	135		$	145		$	155		$	168		$	179		(7)%	(25)%
30+ Delinq. % (b) (c)	3.28		%	3.50		%	1.67		%	1.14		%	2.87		%
NPL %	9.50			8.56			10.36			11.29			10.97
Charge-offs % (qtr. annualized)	NM			NM			NM			NM			NM
Allowance / loans %	6.44		%	6.05		%	5.57		%	5.96		%	6.10		%
Allowance / net charge-offs	NM			NM			NM			NM			NM

Other Consumer
Period-end loans ($ millions)	$	35		$	45		$	57		$	70		$	87		(22)%	(60)%
30+ Delinq. % (b)	4.05		%	3.78		%	4.21		%	4.61		%	5.35		%
NPL %	0.85			0.72			0.72			0.56			0.69
Charge-offs % (qtr. annualized)	1.83			2.84			4.41			4.35			6.77
Allowance / loans %	0.09		%	0.09		%	0.09		%	0.20		%	0.15		%
Allowance / net charge-offs	0.04		x	0.03		x	0.02		x	0.04		x	0.02		x

NM - Not meaningful


(a)	In 2Q19, the HBF portfolio was retrospectively reclassed from Regional Banking segment to the Non-Strategic segment.


(b)	30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.


(c)	3Q19 increase in delinquencies as a percentage of total loans was primarily driven by two credits.

FHN NON-GAAP TO GAAP RECONCILIATION

Quarterly/Annually, Unaudited



																Twelve Months Ended
(Dollars and shares in thousands, except per share data)	4Q19			3Q19			2Q19			1Q19			4Q18			2019			2018

Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)	$	5,076,008		$	4,996,043		$	4,926,081		$	4,846,521		$	4,785,380		$	5,076,008		$	4,785,380
Less: Noncontrolling interest (a)	295,431			295,431			295,431			295,431			295,431			295,431			295,431
Less: Preferred stock (a)	95,624			95,624			95,624			95,624			95,624			95,624			95,624
(B) Total common equity	$	4,684,953		$	4,604,988		$	4,535,026		$	4,455,466		$	4,394,325		$	4,684,953		$	4,394,325
Less: Intangible assets (GAAP) (b)	1,562,987			1,569,193			1,575,399			1,581,605			1,587,821			1,562,987			1,587,821
(C) Tangible common equity (Non-GAAP)	$	3,121,966		$	3,035,795		$	2,959,627		$	2,873,861		$	2,806,504		$	3,121,966		$	2,806,504

Tangible Assets (Non-GAAP)
(D) Total assets (GAAP)	$	43,310,900		$	43,717,684		$	42,171,770		$	41,099,003		$	40,832,258		$	43,310,900		$	40,832,258
Less: Intangible assets (GAAP) (b)	1,562,987			1,569,193			1,575,399			1,581,605			1,587,821			1,562,987			1,587,821
(E) Tangible assets (Non-GAAP)	$	41,747,913		$	42,148,491		$	40,596,371		$	39,517,398		$	39,244,437		$	41,747,913		$	39,244,437

Average Tangible Common Equity (Non-GAAP)
(F) Average total equity (GAAP)	$	5,039,868		$	4,962,341		$	4,869,161		$	4,809,235		$	4,730,698		$	4,920,899		$	4,617,529
Less: Average noncontrolling interest (a)	295,431			295,431			295,431			295,431			295,431			295,431			295,431
Less: Average preferred stock (a)	95,624			95,624			95,624			95,624			95,624			95,624			95,624
(G) Total average common equity	$	4,648,813		$	4,571,286		$	4,478,106		$	4,418,180		$	4,339,643		$	4,529,844		$	4,226,474
Less: Average intangible assets (GAAP) (b)	1,566,079			1,572,312			1,578,505			1,584,694			1,569,533			1,575,338			1,569,987
(H) Average tangible common equity (Non-GAAP)	$	3,082,734		$	2,998,974		$	2,899,601		$	2,833,486		$	2,770,110		$	2,954,506		$	2,656,487

Annualized Net Income/(loss) Available to Common Shareholders
(I) Net income /(loss) available to common shareholders (quarters are annualized) (GAAP)	$	463,483		$	434,469		$	438,562		$	401,642		$	382,238		$	434,708		$	538,842

Period-end Shares Outstanding
(J) Period-end shares outstanding	311,469			311,180			312,478			315,361			318,573			311,469			318,573

Ratios
(I)/(G) Return on average common equity (“ROCE”) (GAAP)	9.97		%	9.50		%	9.79		%	9.09		%	8.81		%	9.60		%	12.75		%
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP)	15.03		%	14.49		%	15.12		%	14.17		%	13.80		%	14.71		%	20.28		%
(A)/(D) Total equity to total assets (GAAP)	11.72		%	11.43		%	11.68		%	11.79		%	11.72		%	11.72		%	11.72		%
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)	7.48		%	7.20		%	7.29		%	7.27		%	7.15		%	7.48		%	7.15		%
(B)/(J) Book value per common share (GAAP)	$	15.04		$	14.80		$	14.51		$	14.13		$	13.79		$	15.04		$	13.79
(C)/(J) Tangible book value per common share (Non-GAAP)	$	10.02		$	9.76		$	9.47		$	9.11		$	8.81		$	10.02		$	8.81


(a)	Included in Total equity on the Consolidated Balance Sheet.


(b)	Includes goodwill and other intangible assets, net of amortization.

FHN GLOSSARY OF TERMS

Average Assets for Leverage: The amount of assets a company uses to calculate the leverage ratio, which includes average total assets less disallowed portions of goodwill, other intangibles, and deferred tax assets, as well as certain other regulatory adjustments made to tier 1 capital.

Common Equity Tier 1 Ratio: Ratio consisting of common equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, less disallowed portions of goodwill, other intangibles, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

Core Businesses: Management considers regional banking, fixed income, and corporate as FHN’s core businesses. Non-strategic has legacy assets and operations that are being wound down.

Fully Taxable Equivalent (“FTE”): Reflects the amount of tax-exempt income adjusted to a level that would yield the same after-tax income had that income been subject to taxation.

Market-Indexed Deposits: Deposits with pricing tied to an index not administered by FHN. For FHN these are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.

Risk-Weighted Assets: A regulatory risk-based calculation that takes into account the broad differences in risks among a banking organization’s assets and off-balance sheet financial instruments.

Tier 1 Capital Ratio: Ratio consisting of shareholders’ equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, plus qualifying portions of noncontrolling interests, less disallowed portions of goodwill, other intangible assets, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

Key Ratios

Return on Average Assets: Ratio is annualized net income to average total assets.

Return on Average Common Equity: Ratio is annualized net income available to common shareholders to average common equity.

Return on Average Tangible Common Equity: Ratio is annualized net income available to common shareholders to average tangible common equity.

Fee Income to Total Revenue: Ratio is fee income excluding securities gains/(losses) to total revenue excluding securities gains/(losses).

Efficiency Ratio: Ratio is noninterest expense to total revenue excluding securities gains/(losses).

Leverage Ratio: Ratio is tier 1 capital to average assets for leverage.

Asset Quality - Consolidated Key Ratios

NPL %: Ratio is nonperforming loans in the loan portfolio to total period-end loans.

NPA %: Ratio is nonperforming assets related to the loan portfolio to total period-end loans plus foreclosed real estate and other assets.

Net charge-offs %: Ratio is annualized net charge-offs to total average loans.

Allowance / loans: Ratio is allowance for loan losses to total period-end loans.

Allowance / NPL: Ratio is allowance for loan losses to nonperforming loans in the loan portfolio.

Allowance / NPA: Ratio is allowance for loan losses to nonperforming assets related to the loan portfolio.

Allowance / charge-offs: Ratio is allowance for loan losses to annualized net charge-offs.