EX-99.1 2 a4q17financialsupplement.htm EXHIBIT 99.1
1

FOURTH QUARTER 2017
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
Balance Sheet |
Period End Balance Sheet | 9
Average Balance Sheet | 10
Net Interest Income | 11
Average Balance Sheet: Yields and Rates | 12
Capital Highlights | 13
Business Segment Detail |
Segment Highlights | 14
Regional Banking | 15
Fixed Income and Corporate | 16
Non-Strategic | 17
Asset Quality |
Asset Quality: Consolidated | 18
Asset Quality: Regional Banking and Corporate | 20
Asset Quality: Non-Strategic | 21
Non-GAAP to GAAP Reconciliation | 22
Glossary of Terms | 23

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 22 of this financial supplement.
2

FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE |

3

FHN PERFORMANCE HIGHLIGHTS
Summary of Fourth Quarter 2017 Notable Items
Segment |  | Item |  | Income Statement |  | Amount Favorable/ (Unfavorable) |  | Comments
Corporate |  | Acquisition expenses |  | Noninterest expense: Various |  | $(46.7) million |  | Pre-tax acquisition-related expenses primarily associated with the Capital Bank Financial acquisition
Primarily Non-Strategic |  | Legal matters |  | Noninterest expense: Litigation and regulatory matters |  | $(32.1) million |  | Pre-tax loss accruals related to legal matters
Primarily Corporate & Regional Banking |  | Employee compensation |  | Noninterest expense: Employee compensation, incentives, and benefits |  | $(9.9) million |  | Pre-tax expense related to special employee bonuses
Corporate |  | Tax adjustments - Tax Reform |  | Provision for Income Taxes |  | $(82.0) million |  | Estimated after-tax effects of tax reform primarily associated with a decrease in the valuation of the net deferred tax asset balance (see note below)
Corporate |  | Tax adjustments - Capital Loss Carryforward/Other |  | Provision for Income Taxes |  | $10.7 million |  | Favorable effective tax rate adjustment primarily associated with the reversal of a capital loss deferred tax valuation allowance
Fourth Quarter 2017 vs. Third Quarter 2017

Consolidated

• | On November 30, 2017, FHN closed its previously announced merger with Capital Bank Financial ("Capital Bank" or "CBF") using the purchase business combinations method, increasing its balance sheet by $10.6 billion

• | In December 2017, Congress enacted the Tax Cuts and Jobs Act ("the Tax Act"), which resulted in an estimated $82.0 million impact primarily related to a decrease in the valuation of FHN's net deferred tax asset balance, significantly impacting FHN's results for both fourth quarter and 2017. The impact from the Tax Act may differ from this estimate, possibly materially, due to among other things, further refinement of FHN's calculations, changes in interpretations and assumptions FHN has made, guidance that may be issued and actions FHN make take as a result of the Tax Act

• | Net loss available to common shareholders was $52.8 million, or $.20 loss per diluted share in fourth quarter compared to net income available to common shareholders of $67.3 million, or $.28 per diluted share in third quarter

• | Net interest income (“NII”) increased to $242.1 million in fourth quarter fr om $209.8 million in third quarter; Net Interest Margin (“NIM”) increased to 3.27 percent in fourth quarter from 3.19 percent in prior quarter

• | The increase in NII in fourth quarter was primarily driven by loan and deposit growth associated with the CBF acquisition, the positive impact of higher market rates, and higher average balances of other commercial loans

• | The increase in NIM was also largely the result of loan and deposit growth assoc iated with the CBF acquisition

• | Noninterest income (including securities gains) increased to $133.2 million in fourth quarter from $112.4 million in prior quarter

• | Fourth quarter includes a $1.3 million gain related to BOLI policy benefits

• | Third quarter includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction

• | Noninterest expense increased to $346.7 million in fourth quarter from $236.9 million in third quarter

• | The expense increase was driven by a $38.5 million increase in acquisition-related expenses associated with the CBF acquisition, a $23.9 million increase in loss accruals related to legal matters, $9.9 million of special bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, som ewhat offset by $4.3 million of deferred compensation BOLI gains

• | Provision for income taxes was $74.0 million and $13.6 million in the fourth and third quarters, respectively

• | Fourth quarter increase was primarily associated with the effects of the Tax Act

• | Period-end loans were $27.7 billion in fourth quarter and $20.2 billion in third quarter; average loans increased 13 percent to $22.5 billion in fourth quarter

• | Period-end deposits were $30.6 billion and $22.1 billion in fourth and third quarter, respectively; average deposits increased 13 percent linked quarter to $24.9 billion in fourth quarter

Regional Banking

• | Pre-tax income increased to $126.5 million in fourth quarter from $114.7 million in third quarter; pre-provision net revenue was $136.2 million and $123.2 million in fourth and third quarter, respectively

• | Period-end loans increased to $26.3 billion in fourth quarter from $18.8 billion in third quarter; average loans increased 15 percent to $21.1 billion in fourth quarter

• | The increase in period-end and average loans was primarily due to the addition of $7.4 billion in UPB of loans from the CBF acquisition.

• | Period-end deposits were $27.6 billion and $20.1 billion in fourth and third quarter, respectively; average deposits increased 12 percent to $22.4 billion

• | The increase in period-end and average deposits was primarily the result of $8.1 billion of deposits acquired in th e CBF acquisition

• | NII increased to $244.3 million in fourth quarter from $209.3 million in third quarter

• | The increase in NII was largely due to loan and deposit growth associated with the CBF acquisition

• | Provision expense was $9.7 million in fourth quarter compared to $8.6 million in the prior quarter

• | Fourth quarter 2017 provision expense was primarily dri ven by a charge-off associated with a single larger credit resulting in fraud loss

• | Noninterest income increased to $70.5 million in fourth quarter from $64.4 million in third quarter

• | The increase in noninterest income was primarily due to higher fee income associated with deposit transactions and cash management and bankcard income largely driven by the CBF acquisition

• | Noninterest expense increased to $178.6 million in fourth quarter from $150.5 million in third quarter

• | Fourth quarter expense includes $19.1 million attributable to CBF activities, including $10.7 million of personnel-related expenses associated with a 27 percent increase in headcount, and $4.1 million in special bonuses

• | Third quarter expense includes $4.4 million of loss accruals related to legal matters associated with trust services

4

FHN PERFORMANCE HIGHLIGHTS (continued)
Fourth Quarter 2017 vs. Third Quarter 2017 (continued)

Fixed Income

• | Pre-tax income was $6.0 million in fourth quarter, down from $8.7 million in third quarter

• | NII was $5.9 million and $6.0 million in fourth quarter and third quarter, respectively

• | Noninterest income was $55.2 million in fourth quarter compared to $55.8 million in third quarter

• | Fixed income product revenue decreased to $40.6 million in fourth quarter from $45.0 million in third quarter

• | Fixed income product average daily revenue (“ADR”) was $655 thousand and $715 thousand in fourth and third quarter, respectively

• | Other product revenue increased $3.9 million to $14.6 million in fourth quarter largely due to increases in fees from loan sales

• | Noninterest expense increased to $55.1 million in fourth quarter from $53.1 million in third quarter

Corporate

• | Pre-tax loss was $83.1 million in fourth quarter compared to pre-tax loss of $47.4 million in third quarter

• | NII was negative $15.9 million and negative $14.0 million in fourth and third quarter, respectively

• | Estimated effective duration of the securities portfolio was 3.7 years in fourth quarter and was 3.8 years in third quarter

• | Noninterest income (including net securities gains) was positive $6.7 million in fourth quarter compared to negative $9.5 million in third quarter

• | Fourth quarter includes a $1.3 million gain related to BOLI policy benefits

• | Third quarter includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction

• | Noninterest expense was $74.0 milli on in fourth quarter compared to $23.9 million in third quarter

• | Fourth quarter expense includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisiti on, $5.7 million of special employee bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, som ewhat offset by $4.3 million of deferred compensation BOLI gains

• | FDIC expense increased $3.0 million in fourth quarter due to the loss recognized during fourth quarter

• | Third quarter expense includes $8.2 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions

Non-Strategic

• | Pre-tax loss was $23.7 million in fourth quarter compared to pre-tax income of $9.4 million in third quarter

• | NII decreased to $7.8 million in fourth quarter from $8.5 million in third quarter

• | The provision credit decreased to $6.7 million in fourth quarter from a provision credit of $8.6 million in third quarter

• | The level of provision continues to reflect declining balances combined with stable performance within the legacy portfolio combined with higher recoveries in third and fourth quarter

• | Noninterest expense was $38.9 million in the fourth quarter compared to $9.4 million in third quarter

• | Fourth quarter expense includes $32.0 million of pre-tax loss accruals related to legal matters, compared to $3.6 million in third quarter

Asset Quality

• | Allowance for loan losses decreased to $189.6 million in fourth quarter from $194.9 million in third quarter; the allowance to loans ratio decreased 28 bps to 69 basis points in fourth quarter driven by the addition of loans acquired from Capital Bank at fair value which includes an estimate of lifetime credit losses

• | The decrease in reserves was primarily driven by the consumer portfolio within the non-strategic segment

• | To a lesser extent, the commercial portfolio within the regional banking segment declined due to lower average loss rates

• | Net charge-offs were $8.3 million in fourth quarter compared to $2.4 million in third quarter

• | Regional banking net charge-offs increased $5.9 million to $11.6 million in fourth quarter primarily due to a single larger credit within the C&I portfolio as a result of borrower fraud

• | Non-strategic net recoveries remained flat in fourth quarter at $3.3 million

• | Nonperforming loans (“NPLs”), excluding loans held-for-sale, increased to $130.6 million in fourth quarter from $125.0 million in third quarter; NPLs within all portfolios decreased or remained flat with the exception of C&I which increased $12.2 million primarily driven by a single larger credit

• | 30+ delinquencies increased $16.3 million to $92.5 million in fourth quarter compared to $76.2 million in third quarter

• | The consumer portfolio increased $15.0 million of which Capital Bank contributed to $12.7 million of the increase

Taxes

• | The effective tax rates for fourth and third quarter were 288.93 percent and 15.93 percent, respectively

• | Fourth quarter effective rate was negatively impacted by the estimated effects of tax reform primarily associated with a decrease in the valuation of the net deferred tax asset balance. The impact from the tax reform may differ from this estimate, possibly materially, due to, among other things, further refinement of FHN's calculations, changes in interpretations and assumptions FHN has made, guidance that may be issued and actions FHN may take as a result of tax reform

• | Fourth quarter and third quarter effective rates were favorably impacted by the reversal of a capital loss deferred tax valuation allowance

• | The rates also reflect the favorable effect from permanent benefits. Permanent benefits primarily consist of tax credit investments, life insurance, contributions of appreciated property, and tax-exempt interest

5

FHN PERFORMANCE HIGHLIGHTS (continued)
Fourth Quarter 2017 vs. Third Quarter 2017 (continued)

Capital and Liquidity

• | Declared $.09 per common share quarterly dividend in fourth quarter, aggregating $21.0 million, which was paid on January 2, 2018

• | Declared aggregate preferred quarterly dividend of $1.6 million in fourth quarter which was paid on January 10, 2018

• | There were no repurchases of shares in fourth quarter under the current share repurchase program (unrelated to employee stock award programs); $189.7 million remains in t he stock purchase authorization first announced in 2014, currently scheduled to expire January 31, 2018

• | Capital ratios (regulatory capital ratios calculated under the Basel III risk-based capital rules as phased-in; current quarter is an estimate; estimate does not include the favorable impact of reclassification from AOCI to retained earnings of approximately $58 million in connection with tax law change per bank regulatory guidance issued on January 18, 2018)

• | Total equity to total assets (GAAP) of 11.06 percent in fourth quarter compared to 9.73 percent in prior quarter

• | Tangible common equity to tangible assets (Non-GAAP) of 6.57 percent in fourth quarter compared to 7.54 percent in prior quarter

• | Common Equity Tier 1 of 8.68 percent in fourth quarter compared to 10.04 percent in prior quarter

• | Tier 1 of 9.64 percent in fourth quarter compared to 11.20 percent in prior quarter

• | Total Capital of 10.88 percent in fourth quarter compared to 12.18 percent in prior quarter

• | Leverage of 10.16 percent in fourth quarter compared to 9.60 percent in prior quarter

Consolidated Results for Fiscal Year 2017 vs. 2016

• | Net income available to common shareholders was $159.3 million, or $.65 per diluted share in 2017, compared to $220.8 million, or $.94 per diluted share in 2016

• | Net interest income ("NII") increased 16 percent in 2017 to $842.3 million from $729.1 million in 2016; Net interest margin ("NIM") increased to 3.12 percent from 2.94 percent

• | The increase in NII was primarily driven by organic loan growth within the regional banking commercial loan portfolio, the impact of higher market rates, and commercial and consumer loans added through the CBF acquisition, somew hat offset by lower average balances of consumer loans and loans to mortgage companies

• | The improvement in NIM in 2017 relative to 2016 was largely the result of the positive impact of higher market rates and an increase in average deposits, somewhat offset by an increase in average excess cash held at the Fed during 2017

• | Noninterest income (including securities gains) decreased to $490.2 million in 2017 from $552.4 million in 2016 primarily driven by a 19 percent decrease in fixed income sales revenue in 2017 and a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction recognized in 2017

• | Provision expense was $0 in 2017 compared to $11.0 million in 2016 reflecting continued strong performance in both the commercial and consumer portfolios

• | Reserves decreased $12.5 million from 2016 while net charge-offs decreased $6.7 million from 2016, both driven by the consumer portfolio

• | Noninterest expense increased to $1.0 billion in 2017 from $.9 billion in 2016 largely due to a $59.8 million increase in acquisition-related costs primarily associated with the CBF and Coastal Securities, Inc. ("Coastal") acquisitions in 2017 relative to 2016

• | To a lesser extent, a smaller repurchase and foreclosure provision expense reversal related to the settlement of certain repurchase claims in 2017 relative to 2016 ($22.5 million and $32.7 million, respectively) and a $10.0 million increase in pre-tax loss accruals related to legal matters recognized in 2017 relative to 2016 also contributed to the increase in expense

• | Period-end loans increased 41 percent to $27.7 billion; average loans were $20.1 billion in 2017 compared to $18.3 billion in 2016

• | The increase in period-end loans was largely due to the addition of $7.4 billion in UPB of loans from the CBF acquisition, and was within the C&I, Commercial real estate and Consumer real estate portfolios

• | Loans added through the CBF acquisition also impacted average loan balances in fourth quarter; however, the impact was less on an average basis due to the late-year timing of the acquisition

• | Period-end deposits increased 35 percent to $30.6 billion; average deposits were $23.1 billion in 2017 compared to $20.9 billion in 2016

• | Increase in period-end deposits was due primarily to the addition of $8.1 billion of deposits associated with the CBF acquisition

• | Commercial interest and consumer interest deposits increased 5 percent and 2 percent, respectively, as a percentage of total deposits in 2017 relative to 2016 on a period-end basis, while market-indexed deposits decreased 7 percent during the period

• | The fourth quarter 2017 CBF acquisition also contributed to the increase in average deposits in 2017; however due to the late-year timing of the acquisition, the impact was much less on an average basis

6

FHN CONSOLIDATED INCOME STATEMENT
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs. |  | Twelve Months Ended |  | 2017 vs.
(Dollars in thousands, except per share data) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  | 2016 |  | 2016
Interest income | $ | 287,633 |  |  | $ | 248,145 |  |  | $ | 235,341 |  |  | $ | 218,811 |  |  | $ | 219,897 |  |  | 16 |  | % | 31 |  | % |  | $ | 989,930 |  |  | $ | 817,909 |  |  | 21 |  | %
Less: interest expense | 45,545 |  |  | 38,328 |  |  | 34,640 |  |  | 29,103 |  |  | 24,346 |  |  | 19 |  | % | 87 |  | % |  | 147,616 |  |  | 88,825 |  |  | 66 |  | %
Net interest income | 242,088 |  |  | 209,817 |  |  | 200,701 |  |  | 189,708 |  |  | 195,551 |  |  | 15 |  | % | 24 |  | % |  | 842,314 |  |  | 729,084 |  |  | 16 |  | %
Provision/(provision credit) for loan losses | 3,000 |  |  | — |  |  | (2,000 | ) |  | (1,000 | ) |  | — |  |  | NM |  |  | NM |  |  |  | — |  |  | 11,000 |  |  | NM |  |
Net interest income after provision for loan losses | 239,088 |  |  | 209,817 |  |  | 202,701 |  |  | 190,708 |  |  | 195,551 |  |  | 14 |  | % | 22 |  | % |  | 842,314 |  |  | 718,084 |  |  | 17 |  | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income | 55,079 |  |  | 55,758 |  |  | 55,110 |  |  | 50,678 |  |  | 51,923 |  |  | (1 | ) | % | 6 |  | % |  | 216,625 |  |  | 268,561 |  |  | (19 | ) | %
Deposit transactions and cash management | 30,158 |  |  | 28,011 |  |  | 27,858 |  |  | 24,565 |  |  | 27,504 |  |  | 8 |  | % | 10 |  | % |  | 110,592 |  |  | 108,553 |  |  | 2 |  | %
Brokerage, management fees and commissions | 12,642 |  |  | 11,937 |  |  | 12,029 |  |  | 11,906 |  |  | 11,003 |  |  | 6 |  | % | 15 |  | % |  | 48,514 |  |  | 42,911 |  |  | 13 |  | %
Trust services and investment management | 7,116 |  |  | 6,953 |  |  | 7,698 |  |  | 6,653 |  |  | 7,053 |  |  | 2 |  | % | 1 |  | % |  | 28,420 |  |  | 27,727 |  |  | 2 |  | %
Bankcard income | 8,237 |  |  | 6,170 |  |  | 5,605 |  |  | 5,455 |  |  | 6,353 |  |  | 34 |  | % | 30 |  | % |  | 25,467 |  |  | 24,430 |  |  | 4 |  | %
Bank-owned life insurance | 3,987 |  |  | 3,539 |  |  | 4,351 |  |  | 3,247 |  |  | 3,558 |  |  | 13 |  | % | 12 |  | % |  | 15,124 |  |  | 14,687 |  |  | 3 |  | %
Securities gains/(losses), net | 137 |  |  | 6 |  |  | 405 |  |  | 44 |  |  | (132 | ) |  | NM |  |  | NM |  |  |  | 592 |  |  | 1,341 |  |  | (56 | ) | %
Other (a) | 15,834 |  |  | 43 |  |  | 14,617 |  |  | 14,391 |  |  | 16,815 |  |  | NM |  |  | (6 | ) | % |  | 44,885 |  |  | 64,231 |  |  | (30 | ) | %
Total noninterest income | 133,190 |  |  | 112,417 |  |  | 127,673 |  |  | 116,939 |  |  | 124,077 |  |  | 18 |  | % | 7 |  | % |  | 490,219 |  |  | 552,441 |  |  | (11 | ) | %
Adjusted gross income after provision for loan losses | 372,278 |  |  | 322,234 |  |  | 330,374 |  |  | 307,647 |  |  | 319,628 |  |  | 16 |  | % | 16 |  | % |  | 1,332,533 |  |  | 1,270,525 |  |  | 5 |  | %
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation, incentives, and benefits (b) | 177,593 |  |  | 137,798 |  |  | 139,088 |  |  | 134,932 |  |  | 137,324 |  |  | 29 |  | % | 29 |  | % |  | 589,411 |  |  | 562,948 |  |  | 5 |  | %
Repurchase and foreclosure provision (c) | 53 |  |  | (609 | ) |  | (21,733 | ) |  | (238 | ) |  | (1,104 | ) |  | NM |  |  | NM |  |  |  | (22,527 | ) |  | (32,722 | ) |  | 31 |  | %
Legal fees | 1,245 |  |  | 2,052 |  |  | 3,496 |  |  | 5,283 |  |  | 6,038 |  |  | (39 | ) | % | (79 | ) | % |  | 12,076 |  |  | 21,558 |  |  | (44 | ) | %
Professional fees (d) | 26,958 |  |  | 6,566 |  |  | 9,659 |  |  | 4,746 |  |  | 4,827 |  |  | NM |  |  | NM |  |  |  | 47,929 |  |  | 19,169 |  |  | NM |  |
Occupancy | 15,887 |  |  | 13,619 |  |  | 12,800 |  |  | 12,340 |  |  | 12,818 |  |  | 17 |  | % | 24 |  | % |  | 54,646 |  |  | 50,880 |  |  | 7 |  | %
Computer software | 13,157 |  |  | 11,993 |  |  | 12,285 |  |  | 10,799 |  |  | 11,909 |  |  | 10 |  | % | 10 |  | % |  | 48,234 |  |  | 45,122 |  |  | 7 |  | %
Contract employment and outsourcing (e) | 5,979 |  |  | 2,762 |  |  | 3,255 |  |  | 2,958 |  |  | 2,696 |  |  | NM |  |  | NM |  |  |  | 14,954 |  |  | 10,061 |  |  | 49 |  | %
Operations services | 10,619 |  |  | 10,805 |  |  | 11,524 |  |  | 10,875 |  |  | 10,913 |  |  | (2 | ) | % | (3 | ) | % |  | 43,823 |  |  | 41,852 |  |  | 5 |  | %
Equipment rentals, depreciation, and maintenance | 9,530 |  |  | 6,626 |  |  | 7,036 |  |  | 6,351 |  |  | 7,959 |  |  | 44 |  | % | 20 |  | % |  | 29,543 |  |  | 27,385 |  |  | 8 |  | %
FDIC premium expense | 9,090 |  |  | 6,062 |  |  | 5,927 |  |  | 5,739 |  |  | 6,095 |  |  | 50 |  | % | 49 |  | % |  | 26,818 |  |  | 21,585 |  |  | 24 |  | %
Advertising and public relations (f) | 5,313 |  |  | 5,205 |  |  | 4,095 |  |  | 4,601 |  |  | 6,093 |  |  | 2 |  | % | (13 | ) | % |  | 19,214 |  |  | 21,612 |  |  | (11 | ) | %
Communications and courier | 5,379 |  |  | 4,328 |  |  | 4,117 |  |  | 3,800 |  |  | 3,593 |  |  | 24 |  | % | 50 |  | % |  | 17,624 |  |  | 14,265 |  |  | 24 |  | %
Amortization of intangible assets | 3,568 |  |  | 1,964 |  |  | 1,964 |  |  | 1,232 |  |  | 1,300 |  |  | 82 |  | % | NM |  |  |  | 8,728 |  |  | 5,198 |  |  | 68 |  | %
Other (a) | 62,299 |  |  | 27,698 |  |  | 24,404 |  |  | 18,787 |  |  | 27,436 |  |  | NM |  |  | NM |  |  |  | 133,188 |  |  | 116,291 |  |  | 15 |  | %
Total noninterest expense | 346,670 |  |  | 236,869 |  |  | 217,917 |  |  | 222,205 |  |  | 237,897 |  |  | 46 |  | % | 46 |  | % |  | 1,023,661 |  |  | 925,204 |  |  | 11 |  | %
Income before income taxes | 25,608 |  |  | 85,365 |  |  | 112,457 |  |  | 85,442 |  |  | 81,731 |  |  | (70 | ) | % | (69 | ) | % |  | 308,872 |  |  | 345,321 |  |  | (11 | ) | %
Provision for income taxes (g) | 73,989 |  |  | 13,596 |  |  | 17,253 |  |  | 27,054 |  |  | 24,008 |  |  | NM |  |  | NM |  |  |  | 131,892 |  |  | 106,810 |  |  | 23 |  | %
Net income/(loss) | (48,381 | ) |  | 71,769 |  |  | 95,204 |  |  | 58,388 |  |  | 57,723 |  |  | NM |  |  | NM |  |  |  | 176,980 |  |  | 238,511 |  |  | (26 | ) | %
Net income attributable to noncontrolling interest | 2,910 |  |  | 2,883 |  |  | 2,852 |  |  | 2,820 |  |  | 2,879 |  |  | 1 |  | % | 1 |  | % |  | 11,465 |  |  | 11,465 |  |  | * |  |
Net income/(loss) attributable to controlling interest | (51,291 | ) |  | 68,886 |  |  | 92,352 |  |  | 55,568 |  |  | 54,844 |  |  | NM |  |  | NM |  |  |  | 165,515 |  |  | 227,046 |  |  | (27 | ) | %
Preferred stock dividends | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | * |  |  | * |  |  |  | 6,200 |  |  | 6,200 |  |  | * |  |
Net income/(loss) available to common shareholders | $ | (52,841 | ) |  | $ | 67,336 |  |  | $ | 90,802 |  |  | $ | 54,018 |  |  | $ | 53,294 |  |  | NM |  |  | NM |  |  |  | $ | 159,315 |  |  | $ | 220,846 |  |  | (28 | ) | %
Common Stock Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS | $ | (0.20 | ) |  | $ | 0.29 |  |  | $ | 0.39 |  |  | $ | 0.23 |  |  | $ | 0.23 |  |  | NM |  |  | NM |  |  |  | $ | 0.66 |  |  | $ | 0.95 |  |  | (31 | ) | %
Basic shares (thousands) | 265,169 |  |  | 233,749 |  |  | 233,482 |  |  | 233,076 |  |  | 232,731 |  |  | 13 |  | % | 14 |  | % |  | 241,436 |  |  | 232,700 |  |  | 4 |  | %
Diluted EPS | $ | (0.20 | ) |  | $ | 0.28 |  |  | $ | 0.38 |  |  | $ | 0.23 |  |  | $ | 0.23 |  |  | NM |  |  | NM |  |  |  | $ | 0.65 |  |  | $ | 0.94 |  |  | (31 | ) | %
Diluted shares (thousands) | 265,169 |  |  | 236,340 |  |  | 236,263 |  |  | 236,855 |  |  | 235,590 |  |  | 12 |  | % | 13 |  | % |  | 244,453 |  |  | 235,292 |  |  | 4 |  | %
Key Ratios & Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (quarters are annualized) (h) | (0.58 | )% |  | 0.99 | % |  | 1.32 | % |  | 0.82 | % |  | 0.80 | % |  |  |  |  |  |  |  |  | 0.59 | % |  | 0.87 | % |  |  |
Return on average common equity (“ROE”) (quarters are annualized) (h) | (6.73 | )% |  | 10.79 | % |  | 15.26 | % |  | 9.40 | % |  | 9.00 | % |  |  |  |  |  |  |  |  | 6.18 | % |  | 9.60 | % |  |  |
Return on average tangible common equity (“ROTCE”)(quarters are annualized) (h) (i) | (8.78 | )% |  | 12.17 | % |  | 17.30 | % |  | 10.33 | % |  | 9.89 | % |  |  |  |  |  |  |  |  | 7.23 | % |  | 10.59 | % |  |  |
Fee income to total revenue (h) | 35.47 | % |  | 34.89 | % |  | 38.80 | % |  | 38.13 | % |  | 38.84 | % |  |  |  |  |  |  |  |  | 36.76 | % |  | 43.05 | % |  |  |
Efficiency ratio (h) | 92.41 | % |  | 73.51 | % |  | 66.44 | % |  | 72.47 | % |  | 74.40 | % |  |  |  |  |  |  |  |  | 76.85 | % |  | 72.27 | % |  |  |
Average full time equivalent employees | 4,792 |  |  | 4,277 |  |  | 4,328 |  |  | 4,258 |  |  | 4,248 |  |  |  |  |  |  |  |  |  | 4,415 |  |  | 4,241 |  |  |  |

NM - Not meaningful
* Amount is less than one percent.
(a) Refer to the Other Income and Other Expense table on page 8 for additional information.
(b) 4Q17 includes $16.8 million of acquisition-related expenses associated with the CBF acquisition and $9.9 million of special employee bonuses,
somewhat offset by $4.3 million of deferred compensation BOLI gains.
(c) Expense reversals driven by the settlements/recoveries of certain repurchase claims.
(d) 4Q17 includes $20.3 million of acquisition-related expenses associated with the CBF acquisition; 3Q17 and 2Q17 increases largely driven by acquisition-related expenses primarily associated with the CBF and Coastal acquisitions.
(e) 4Q17 includes $.9 million of acquisition-related expenses associated with the CBF acquisition.
(f) 4Q16 includes $1.1 million related to CRA initiatives.
(g) 4Q17 increase primarily associated with the effects of the Tax Act; 4Q17, 3Q17 and 2Q17 include the impact of a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance.
(h) See Glossary of Terms for definitions of Key Ratios.
(i) This non-GAAP measure is reconciled to ROE (GAAP) in the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement.
7

FHN OTHER INCOME AND OTHER EXPENSE
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs. | Twelve Months Ended |  | 2017 vs.
(Thousands) |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  | 2016 |  | 2016
Other Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ATM and interchange fees |  | $ | 3,427 |  |  | $ | 3,137 |  |  | $ | 3,083 |  |  | $ | 2,778 |  |  | $ | 3,047 |  |  | 9 |  | % | 12 |  | % |  | $ | 12,425 |  |  | $ | 11,965 |  |  | 4 |  | %
Electronic banking fees |  | 1,171 |  |  | 1,282 |  |  | 1,306 |  |  | 1,323 |  |  | 1,301 |  |  | (9 | ) | % | (10 | ) | % |  | 5,082 |  |  | 5,477 |  |  | (7 | ) | %
Letter of credit fees |  | 1,292 |  |  | 1,211 |  |  | 1,122 |  |  | 1,036 |  |  | 946 |  |  | 7 |  | % | 37 |  | % |  | 4,661 |  |  | 4,103 |  |  | 14 |  | %
Mortgage banking (a) |  | 766 |  |  | 1,354 |  |  | 1,268 |  |  | 1,261 |  |  | 2,820 |  |  | (43 | ) | % | (73 | ) | % |  | 4,649 |  |  | 10,215 |  |  | (54 | ) | %
Deferred compensation (b) |  | 1,876 |  |  | 1,128 |  |  | 1,491 |  |  | 1,827 |  |  | 863 |  |  | 66 |  | % | NM |  |  |  | 6,322 |  |  | 3,025 |  |  | NM |  |
Insurance commissions |  | 472 |  |  | 567 |  |  | 592 |  |  | 883 |  |  | 680 |  |  | (17 | ) | % | (31 | ) | % |  | 2,514 |  |  | 2,981 |  |  | (16 | ) | %
Other service charges |  | 3,485 |  |  | 2,954 |  |  | 3,109 |  |  | 2,984 |  |  | 3,018 |  |  | 18 |  | % | 15 |  | % |  | 12,532 |  |  | 11,731 |  |  | 7 |  | %
Gain/(loss) on extinguishment of debt (c) |  | — |  |  | (14,329 | ) |  | — |  |  | — |  |  | — |  |  | NM |  |  | NM |  |  |  | (14,329 | ) |  | — |  |  | NM |  |
Other |  | 3,345 |  |  | 2,739 |  |  | 2,646 |  |  | 2,299 |  |  | 4,140 |  |  | 22 |  | % | (19 | ) | % |  | 11,029 |  |  | 14,734 |  |  | (25 | ) | %
Total |  | $ | 15,834 |  |  | $ | 43 |  |  | $ | 14,617 |  |  | $ | 14,391 |  |  | $ | 16,815 |  |  | NM |  |  | (6 | ) | % |  | $ | 44,885 |  |  | $ | 64,231 |  |  | (30 | ) | %
Other Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Litigation and regulatory matters |  | $ | 32,114 |  |  | $ | 8,162 |  |  | $ | 533 |  |  | $ | (292 | ) |  | $ | 4,684 |  |  | NM |  |  | NM |  |  |  | $ | 40,517 |  |  | $ | 30,469 |  |  | 33 |  | %
Tax credit investments |  | 822 |  |  | 762 |  |  | 942 |  |  | 942 |  |  | 1,024 |  |  | 8 |  | % | (20 | ) | % |  | 3,468 |  |  | 3,349 |  |  | 4 |  | %
Travel and entertainment |  | 3,154 |  |  | 2,798 |  |  | 3,162 |  |  | 2,348 |  |  | 3,240 |  |  | 13 |  | % | (3 | ) | % |  | 11,462 |  |  | 10,275 |  |  | 12 |  | %
Employee training and dues |  | 1,357 |  |  | 1,198 |  |  | 1,453 |  |  | 1,543 |  |  | 1,603 |  |  | 13 |  | % | (15 | ) | % |  | 5,551 |  |  | 5,691 |  |  | (2 | ) | %
Customer relations |  | 1,510 |  |  | 1,361 |  |  | 1,543 |  |  | 1,336 |  |  | 1,451 |  |  | 11 |  | % | 4 |  | % |  | 5,750 |  |  | 6,255 |  |  | (8 | ) | %
Miscellaneous loan costs |  | 673 |  |  | 757 |  |  | 699 |  |  | 622 |  |  | 628 |  |  | (11 | ) | % | 7 |  | % |  | 2,751 |  |  | 2,586 |  |  | 6 |  | %
Supplies |  | 1,222 |  |  | 928 |  |  | 1,093 |  |  | 863 |  |  | 1,320 |  |  | 32 |  | % | (7 | ) | % |  | 4,106 |  |  | 4,434 |  |  | (7 | ) | %
OREO |  | 53 |  |  | 303 |  |  | 446 |  |  | 204 |  |  | 648 |  |  | (83 | ) | % | (92 | ) | % |  | 1,006 |  |  | 773 |  |  | 30 |  | %
Other insurance and taxes |  | 2,457 |  |  | 2,396 |  |  | 2,443 |  |  | 2,390 |  |  | 1,939 |  |  | 3 |  | % | 27 |  | % |  | 9,686 |  |  | 10,891 |  |  | (11 | ) | %
Other (d) |  | 18,937 |  |  | 9,033 |  |  | 12,090 |  |  | 8,831 |  |  | 10,899 |  |  | NM |  |  | 74 |  | % |  | 48,891 |  |  | 41,568 |  |  | 18 |  | %
Total |  | $ | 62,299 |  |  | $ | 27,698 |  |  | $ | 24,404 |  |  | $ | 18,787 |  |  | $ | 27,436 |  |  | NM |  |  | NM |  |  |  | $ | 133,188 |  |  | $ | 116,291 |  |  | 15 |  | %

NM - Not meaningful
(a) 4Q16 includes a $1.5 million gain related to the reversal of a contingency accrual associated with prior sales of MSR.
(b) Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense.
(c) 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.
(d) 4Q17 includes a $5.6 million charitable contribution to the First Tennessee Foundation and $6.2 million of acquisition-related expenses associated with the CBF acquisition; 2Q17 includes a $3.2 million charitable contribution to the First Tennessee Foundation.
8

FHN CONSOLIDATED PERIOD-END BALANCE SHEET
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
(Thousands) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities | $ | 5,180,255 |  |  | $ | 3,973,138 |  |  | $ | 3,959,592 |  |  | $ | 3,953,632 |  |  | $ | 3,957,846 |  |  | 30 |  | % | 31 |  | %
Loans held-for-sale (a) | 699,377 |  |  | 339,780 |  |  | 432,771 |  |  | 105,456 |  |  | 111,248 |  |  | NM |  |  | NM |  |
Loans, net of unearned income | 27,658,929 |  |  | 20,166,091 |  |  | 19,989,319 |  |  | 19,090,074 |  |  | 19,589,520 |  |  | 37 |  | % | 41 |  | %
Federal funds sold | 87,364 |  |  | 76,316 |  |  | 34,036 |  |  | 31,495 |  |  | 50,838 |  |  | 14 |  | % | 72 |  | %
Securities purchased under agreements to resell | 725,609 |  |  | 663,637 |  |  | 657,991 |  |  | 835,222 |  |  | 613,682 |  |  | 9 |  | % | 18 |  | %
Interest-bearing cash (b) | 1,185,600 |  |  | 604,326 |  |  | 573,666 |  |  | 2,106,597 |  |  | 1,060,034 |  |  | 96 |  | % | 12 |  | %
Trading securities | 1,416,345 |  |  | 1,469,402 |  |  | 1,315,891 |  |  | 1,167,310 |  |  | 897,071 |  |  | (4 | ) | % | 58 |  | %
Total earning assets | 36,953,479 |  |  | 27,292,690 |  |  | 26,963,266 |  |  | 27,289,786 |  |  | 26,280,239 |  |  | 35 |  | % | 41 |  | %
Cash and due from banks | 639,073 |  |  | 347,802 |  |  | 387,053 |  |  | 369,290 |  |  | 373,274 |  |  | 84 |  | % | 71 |  | %
Fixed income receivables (c) | 68,693 |  |  | 68,750 |  |  | 127,724 |  |  | 168,315 |  |  | 57,411 |  |  | * |  |  | 20 |  | %
Goodwill (d) | 1,386,853 |  |  | 236,335 |  |  | 236,335 |  |  | 191,371 |  |  | 191,371 |  |  | NM |  |  | NM |  |
Other intangible assets, net (d) | 184,389 |  |  | 43,157 |  |  | 45,121 |  |  | 19,785 |  |  | 21,017 |  |  | NM |  |  | NM |  |
Premises and equipment, net | 532,251 |  |  | 293,393 |  |  | 292,463 |  |  | 290,497 |  |  | 289,385 |  |  | 81 |  | % | 84 |  | %
Other real estate owned ("OREO") | 43,382 |  |  | 12,522 |  |  | 11,901 |  |  | 15,144 |  |  | 16,237 |  |  | NM |  |  | NM |  |
Allowance for loan losses | (189,555 | ) |  | (194,867 | ) |  | (197,257 | ) |  | (201,968 | ) |  | (202,068 | ) |  | (3 | ) | % | (6 | ) | %
Derivative assets | 81,634 |  |  | 80,976 |  |  | 91,653 |  |  | 98,120 |  |  | 121,654 |  |  | 1 |  | % | (33 | ) | %
Other assets | 1,723,189 |  |  | 1,441,878 |  |  | 1,411,697 |  |  | 1,378,260 |  |  | 1,406,711 |  |  | 20 |  | % | 22 |  | %
Total assets | $ | 41,423,388 |  |  | $ | 29,622,636 |  |  | $ | 29,369,956 |  |  | $ | 29,618,600 |  |  | $ | 28,555,231 |  |  | 40 |  | % | 45 |  | %
Liabilities and Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 12,730,766 |  |  | $ | 9,164,017 |  |  | $ | 9,429,788 |  |  | $ | 9,367,537 |  |  | $ | 8,943,616 |  |  | 39 |  | % | 42 |  | %
Commercial interest | 5,608,587 |  |  | 2,915,446 |  |  | 3,285,931 |  |  | 3,275,599 |  |  | 2,943,545 |  |  | 92 |  | % | 91 |  | %
Market-indexed (e) | 4,249,536 |  |  | 3,534,546 |  |  | 3,315,045 |  |  | 4,481,085 |  |  | 4,844,608 |  |  | 20 |  | % | (12 | ) | %
Total interest-bearing deposits | 22,588,889 |  |  | 15,614,009 |  |  | 16,030,764 |  |  | 17,124,221 |  |  | 16,731,769 |  |  | 45 |  | % | 35 |  | %
Noninterest-bearing deposits | 8,040,307 |  |  | 6,485,245 |  |  | 6,302,585 |  |  | 6,355,620 |  |  | 5,940,594 |  |  | 24 |  | % | 35 |  | %
Total deposits | 30,629,196 |  |  | 22,099,254 |  |  | 22,333,349 |  |  | 23,479,841 |  |  | 22,672,363 |  |  | 39 |  | % | 35 |  | %
Federal funds purchased | 399,820 |  |  | 292,650 |  |  | 314,892 |  |  | 504,805 |  |  | 414,207 |  |  | 37 |  | % | (3 | ) | %
Securities sold under agreements to repurchase | 647,768 |  |  | 516,867 |  |  | 743,684 |  |  | 406,354 |  |  | 453,053 |  |  | 25 |  | % | 43 |  | %
Trading liabilities | 638,515 |  |  | 579,028 |  |  | 555,793 |  |  | 848,190 |  |  | 561,848 |  |  | 10 |  | % | 14 |  | %
Other short-term borrowings (f) | 2,626,213 |  |  | 1,637,419 |  |  | 1,044,658 |  |  | 79,454 |  |  | 83,177 |  |  | 60 |  | % | NM |  |
Term borrowings (g) | 1,218,097 |  |  | 1,059,507 |  |  | 1,033,329 |  |  | 1,035,036 |  |  | 1,040,656 |  |  | 15 |  | % | 17 |  | %
Fixed income payables (c) | 48,996 |  |  | 44,304 |  |  | 28,571 |  |  | 21,116 |  |  | 21,002 |  |  | 11 |  | % | NM |  |
Derivative liabilities | 85,061 |  |  | 83,146 |  |  | 92,717 |  |  | 101,347 |  |  | 135,897 |  |  | 2 |  | % | (37 | ) | %
Other liabilities | 549,234 |  |  | 426,910 |  |  | 396,075 |  |  | 401,997 |  |  | 467,944 |  |  | 29 |  | % | 17 |  | %
Total liabilities | 36,842,900 |  |  | 26,739,085 |  |  | 26,543,068 |  |  | 26,878,140 |  |  | 25,850,147 |  |  | 38 |  | % | 43 |  | %
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 204,211 |  |  | 146,395 |  |  | 146,336 |  |  | 146,177 |  |  | 146,015 |  |  | 39 |  | % | 40 |  | %
Capital surplus | 3,147,613 |  |  | 1,401,359 |  |  | 1,395,797 |  |  | 1,391,777 |  |  | 1,386,636 |  |  | NM |  |  | NM |  |
Undivided profits | 1,102,888 |  |  | 1,177,126 |  |  | 1,131,162 |  |  | 1,061,409 |  |  | 1,029,032 |  |  | (6 | ) | % | 7 |  | %
Accumulated other comprehensive loss, net | (265,279 | ) |  | (232,384 | ) |  | (237,462 | ) |  | (249,958 | ) |  | (247,654 | ) |  | 14 |  | % | 7 |  | %
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 | 4,580,488 |  |  | 2,883,551 |  |  | 2,826,888 |  |  | 2,740,460 |  |  | 2,705,084 |  |  | 59 |  | % | 69 |  | %
Total liabilities and equity | $ | 41,423,388 |  |  | $ | 29,622,636 |  |  | $ | 29,369,956 |  |  | $ | 29,618,600 |  |  | $ | 28,555,231 |  |  | 40 |  | % | 45 |  | %

NM - Not meaningful
*Amount is less than one percent.
(a) 4Q17 increase driven by loans acquired from CBF that have been classified as held-for-sale; 2Q17 increase driven by the Coastal acquisition.
(b) Includes excess balances held at Fed; 4Q17 increase driven by the CBF acquisition; 2Q17 decrease due to loan growth and the Coastal acquisition; 1Q17 increase largely driven by an inflow of customer deposits.
(c) Period-end balances fluctuate based on the level of pending unsettled trades.
(d) 4Q17 increase driven by the CBF acquisition; 2Q17 increase driven by the Coastal acquisition.
(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) 4Q17 increase driven by the CBF acquisition.
(h) Consists of preferred stock of subsidiaries.
9

FHN CONSOLIDATED AVERAGE BALANCE SHEET
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  | 4Q17 Changes v s. |  | Twelve Months Ended | 2017 vs.
(Thousands) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  | 2016 |  | 2016
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and industrial (C&I) | $ | 13,756,024 |  |  | $ | 12,474,188 |  |  | $ | 11,830,942 |  |  | $ | 11,381,258 |  |  | $ | 11,987,562 |  |  | 10 |  | % | 15 |  | % |  | $ | 12,367,420 |  |  | $ | 10,932,679 |  |  | 13 |  | %
Commercial real estate | 2,892,949 |  |  | 2,211,831 |  |  | 2,175,733 |  |  | 2,176,355 |  |  | 2,089,314 |  |  | 31 |  | % | 38 |  | % |  | 2,365,763 |  |  | 1,938,939 |  |  | 22 |  | %
Consumer real estate | 5,029,588 |  |  | 4,398,550 |  |  | 4,431,591 |  |  | 4,491,786 |  |  | 4,545,646 |  |  | 14 |  | % | 11 |  | % |  | 4,588,833 |  |  | 4,635,213 |  |  | (1 | ) | %
Permanent mortgage | 400,991 |  |  | 405,287 |  |  | 408,202 |  |  | 415,916 |  |  | 429,914 |  |  | (1 | ) | % | (7 | ) | % |  | 407,552 |  |  | 437,524 |  |  | (7 | ) | %
Credit card and other | 439,057 |  |  | 354,807 |  |  | 355,123 |  |  | 348,123 |  |  | 361,311 |  |  | 24 |  | % | 22 |  | % |  | 374,474 |  |  | 359,515 |  |  | 4 |  | %
Total loans, net of unearned income (a) | 22,518,609 |  |  | 19,844,663 |  |  | 19,201,591 |  |  | 18,813,438 |  |  | 19,413,747 |  |  | 13 |  | % | 16 |  | % |  | 20,104,042 |  |  | 18,303,870 |  |  | 10 |  | %
Loans held-for-sale (b) | 504,577 |  |  | 540,121 |  |  | 320,698 |  |  | 110,726 |  |  | 127,484 |  |  | (7 | ) | % | NM |  |  |  | 370,578 |  |  | 124,262 |  |  | NM |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | 99 |  |  | 109 |  |  | 100 |  |  | 100 |  |  | 100 |  |  | (9 | ) | % | (1 | ) | % |  | 102 |  |  | 100 |  |  | 2 |  | %
U.S. government agencies | 4,042,844 |  |  | 3,762,180 |  |  | 3,755,818 |  |  | 3,735,472 |  |  | 3,810,207 |  |  | 7 |  | % | 6 |  | % |  | 3,824,751 |  |  | 3,814,802 |  |  | * |  |
States and municipalities | 182 |  |  | — |  |  | — |  |  | 4,350 |  |  | 4,344 |  |  | NM |  |  | (96 | ) | % |  | 1,118 |  |  | 5,124 |  |  | (78 | ) | %
Corporate bonds | 29,904 |  |  | 10,000 |  |  | 10,000 |  |  | 10,000 |  |  | 10,000 |  |  | NM |  |  | NM |  |  |  | 15,017 |  |  | 10,000 |  |  | 50 |  |
Other | 203,395 |  |  | 188,361 |  |  | 188,229 |  |  | 186,670 |  |  | 186,452 |  |  | 8 |  | % | 9 |  | % |  | 191,701 |  |  | 186,385 |  |  | 3 |  | %
Total investment securities | 4,276,424 |  |  | 3,960,650 |  |  | 3,954,147 |  |  | 3,936,592 |  |  | 4,011,103 |  |  | 8 |  | % | 7 |  | % |  | 4,032,689 |  |  | 4,016,411 |  |  | * |  |
Trading securities | 1,439,152 |  |  | 1,125,033 |  |  | 1,283,212 |  |  | 929,545 |  |  | 1,283,407 |  |  | 28 |  | % | 12 |  | % |  | 1,195,442 |  |  | 1,212,864 |  |  | (1 | ) | %
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 24,980 |  |  | 29,852 |  |  | 36,936 |  |  | 17,015 |  |  | 19,323 |  |  | (16 | ) | % | 29 |  | % |  | 27,225 |  |  | 23,414 |  |  | 16 |  | %
Securities purchased under agreements to resell | 818,887 |  |  | 664,208 |  |  | 833,253 |  |  | 691,469 |  |  | 792,156 |  |  | 23 |  | % | 3 |  | % |  | 752,063 |  |  | 827,590 |  |  | (9 | ) | %
Interest-bearing cash (c) | 459,868 |  |  | 392,274 |  |  | 970,853 |  |  | 2,117,498 |  |  | 711,485 |  |  | 17 |  | % | (35 | ) | % |  | 978,958 |  |  | 671,681 |  |  | 46 |  | %
Total other earning assets | 1,303,735 |  |  | 1,086,334 |  |  | 1,841,042 |  |  | 2,825,982 |  |  | 1,522,964 |  |  | 20 |  | % | (14 | ) | % |  | 1,758,246 |  |  | 1,522,685 |  |  | 15 |  | %
Total earning assets | 30,042,497 |  |  | 26,556,801 |  |  | 26,600,690 |  |  | 26,616,283 |  |  | 26,358,705 |  |  | 13 |  | % | 14 |  | % |  | 27,460,997 |  |  | 25,180,092 |  |  | 9 |  | %
Allowance for loan losses | (194,859 | ) |  | (196,631 | ) |  | (200,534 | ) |  | (202,618 | ) |  | (201,306 | ) |  | (1 | ) | % | (3 | ) | % |  | (198,634 | ) |  | (203,105 | ) |  | (2 | ) | %
Cash and due from banks | 437,604 |  |  | 355,626 |  |  | 350,832 |  |  | 367,136 |  |  | 334,168 |  |  | 23 |  | % | 31 |  | % |  | 377,932 |  |  | 320,506 |  |  | 18 |  | %
Fixed income receivables | 79,162 |  |  | 54,286 |  |  | 64,779 |  |  | 41,688 |  |  | 83,019 |  |  | 46 |  | % | (5 | ) | % |  | 60,066 |  |  | 76,464 |  |  | (21 | ) | %
Premises and equipment, net | 367,196 |  |  | 293,286 |  |  | 291,769 |  |  | 289,202 |  |  | 282,849 |  |  | 25 |  | % | 30 |  | % |  | 310,530 |  |  | 277,979 |  |  | 12 |  | %
Derivative assets | 68,692 |  |  | 74,453 |  |  | 74,974 |  |  | 84,419 |  |  | 138,451 |  |  | (8 | ) | % | (50 | ) | % |  | 75,588 |  |  | 143,653 |  |  | (47 | ) | %
Other assets | 2,305,962 |  |  | 1,737,006 |  |  | 1,693,840 |  |  | 1,609,996 |  |  | 1,640,781 |  |  | 33 |  | % | 41 |  | % |  | 1,838,334 |  |  | 1,631,638 |  |  | 13 |  | %
Total assets | $ | 33,106,254 |  |  | $ | 28,874,827 |  |  | $ | 28,876,350 |  |  | $ | 28,806,106 |  |  | $ | 28,636,667 |  |  | 15 |  | % | 16 |  | % |  | $ | 29,924,813 |  |  | $ | 27,427,227 |  |  | 9 |  | %
Liabilities and equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 10,279,937 |  |  | $ | 9,244,021 |  |  | $ | 9,330,990 |  |  | $ | 9,003,550 |  |  | $ | 8,641,507 |  |  | 11 |  | % | 19 |  | % |  | $ | 9,467,518 |  |  | $ | 8,537,255 |  |  | 11 |  | %
Commercial interest | 3,684,643 |  |  | 2,876,398 |  |  | 3,086,139 |  |  | 3,097,922 |  |  | 2,819,980 |  |  | 28 |  | % | 31 |  | % |  | 3,187,034 |  |  | 2,812,222 |  |  | 13 |  | %
Market-indexed (d) | 3,958,224 |  |  | 3,523,450 |  |  | 3,809,281 |  |  | 4,666,292 |  |  | 4,787,912 |  |  | 12 |  | % | (17 | ) | % |  | 3,986,095 |  |  | 3,788,420 |  |  | 5 |  | %
Total interest-bearing deposits | 17,922,804 |  |  | 15,643,869 |  |  | 16,226,410 |  |  | 16,767,764 |  |  | 16,249,399 |  |  | 15 |  | % | 10 |  | % |  | 16,640,647 |  |  | 15,137,897 |  |  | 10 |  | %
Federal funds purchased | 425,900 |  |  | 376,150 |  |  | 435,854 |  |  | 552,820 |  |  | 528,266 |  |  | 13 |  | % | (19 | ) | % |  | 447,137 |  |  | 589,223 |  |  | (24 | ) | %
Securities sold under agreements to repurchase | 595,275 |  |  | 680,366 |  |  | 616,837 |  |  | 419,131 |  |  | 378,837 |  |  | (13 | ) | % | 57 |  | % |  | 578,666 |  |  | 425,452 |  |  | 36 |  | %
Trading liabilities | 741,063 |  |  | 597,269 |  |  | 762,667 |  |  | 642,456 |  |  | 745,011 |  |  | 24 |  | % | (1 | ) | % |  | 685,891 |  |  | 771,039 |  |  | (11 | ) | %
Other short-term borrowings (e) | 1,246,087 |  |  | 655,599 |  |  | 221,472 |  |  | 80,939 |  |  | 243,527 |  |  | 90 |  | % | NM |  |  |  | 554,502 |  |  | 198,440 |  |  | NM |  |
Term borrowings | 1,121,268 |  |  | 1,112,735 |  |  | 1,034,020 |  |  | 1,039,719 |  |  | 1,064,206 |  |  | 1 |  | % | 5 |  | % |  | 1,077,257 |  |  | 1,130,169 |  |  | (5 | ) | %
Total interest-bearing liabilities | 22,052,397 |  |  | 19,065,988 |  |  | 19,297,260 |  |  | 19,502,829 |  |  | 19,209,246 |  |  | 16 |  | % | 15 |  | % |  | 19,984,100 |  |  | 18,252,220 |  |  | 9 |  | %
Noninterest-bearing deposits | 6,972,912 |  |  | 6,411,160 |  |  | 6,280,472 |  |  | 6,051,510 |  |  | 6,039,025 |  |  | 9 |  | % | 15 |  | % |  | 6,431,489 |  |  | 5,760,873 |  |  | 12 |  | %
Fixed income payables | 53,401 |  |  | 28,455 |  |  | 36,083 |  |  | 22,843 |  |  | 63,745 |  |  | 88 |  | % | (16 | ) | % |  | 35,261 |  |  | 48,089 |  |  | (27 | ) | %
Derivative liabilities | 65,843 |  |  | 80,916 |  |  | 85,119 |  |  | 84,928 |  |  | 123,460 |  |  | (19 | ) | % | (47 | ) | % |  | 79,154 |  |  | 130,315 |  |  | (39 | ) | %
Other liabilities | 455,536 |  |  | 421,551 |  |  | 399,247 |  |  | 421,328 |  |  | 454,363 |  |  | 8 |  | % | * |  |  |  | 424,501 |  |  | 544,252 |  |  | (22 | ) | %
Total liabilities | 29,600,089 |  |  | 26,008,070 |  |  | 26,098,181 |  |  | 26,083,438 |  |  | 25,889,839 |  |  | 14 |  | % | 14 |  | % |  | 26,954,505 |  |  | 24,735,749 |  |  | 9 |  | %
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 165,991 |  |  | 146,354 |  |  | 146,246 |  |  | 146,098 |  |  | 145,902 |  |  | 13 |  | % | 14 |  | % |  | 151,214 |  |  | 145,943 |  |  | 4 |  | %
Capital surplus | 1,993,908 |  |  | 1,397,883 |  |  | 1,392,718 |  |  | 1,389,062 |  |  | 1,380,843 |  |  | 43 |  | % | 44 |  | % |  | 1,544,651 |  |  | 1,380,972 |  |  | 12 |  | %
Undivided profits | 1,194,840 |  |  | 1,159,451 |  |  | 1,085,326 |  |  | 1,044,388 |  |  | 1,015,742 |  |  | 3 |  | % | 18 |  | % |  | 1,121,519 |  |  | 949,642 |  |  | 18 |  | %
Accumulated other comprehensive loss, net | (239,629 | ) |  | (227,986 | ) |  | (237,176 | ) |  | (247,935 | ) |  | (186,714 | ) |  | 5 |  | % | 28 |  | % |  | (238,131 | ) |  | (176,134 | ) |  | 35 |  | %
Preferred stock | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | * |  |  | * |  |  |  | 95,624 |  |  | 95,624 |  |  | * |  |
Noncontrolling interest (f) | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | * |  |  | * |  |  |  | 295,431 |  |  | 295,431 |  |  | * |  |
Total equity | 3,506,165 |  |  | 2,866,757 |  |  | 2,778,169 |  |  | 2,722,668 |  |  | 2,746,828 |  |  | 22 |  | % | 28 |  | % |  | 2,970,308 |  |  | 2,691,478 |  |  | 10 |  | %
Total liabilities and equity | $ | 33,106,254 |  |  | $ | 28,874,827 |  |  | $ | 28,876,350 |  |  | $ | 28,806,106 |  |  | $ | 28,636,667 |  |  | 15 |  | % | 16 |  | % |  | $ | 29,924,813 |  |  | $ | 27,427,227 |  |  | 9 |  | %

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not meaningful
*Amount is less than one percent.
(a) Includes loans on nonaccrual status.
(b) 2Q17 increase driven by the Coastal acquisition.
(c) Includes excess balances held at Fed; 1Q17 increase largely driven by an inflow of customer deposits; 3Q17 and 2Q17 decreases due to loan growth and the Coastal acquisition.
(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) Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.
(f) Consists of preferred stock of subsidiaries.
10

FHN CONSOLIDATED NET INTEREST INCOME (a)
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
(Thousands) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16
Interest Income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income (b) | $ | 242,950 |  |  | $ | 207,845 |  |  | $ | 195,162 |  |  | $ | 183,031 |  |  | $ | 187,158 |  |  | 17 |  | % | 30 |  | %
Loans held-for-sale | 6,601 |  |  | 6,123 |  |  | 3,510 |  |  | 1,283 |  |  | 1,602 |  |  | 8 |  | % | NM |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 25,911 |  |  | 23,844 |  |  | 24,122 |  |  | 24,221 |  |  | 23,110 |  |  | 9 |  | % | 12 |  | %
States and municipalities | 3 |  |  | — |  |  | — |  |  | 101 |  |  | 102 |  |  | NM |  |  | (97 | ) | %
Corporate bonds | 355 |  |  | 131 |  |  | 132 |  |  | 131 |  |  | 131 |  |  | NM |  |  | NM |  |
Other | 2,015 |  |  | 1,731 |  |  | 1,535 |  |  | 1,414 |  |  | 1,479 |  |  | 16 |  | % | 36 |  | %
Total investment securities | 28,284 |  |  | 25,706 |  |  | 25,789 |  |  | 25,867 |  |  | 24,822 |  |  | 10 |  | % | 14 |  | %
Trading securities | 11,285 |  |  | 8,604 |  |  | 9,846 |  |  | 6,602 |  |  | 8,616 |  |  | 31 |  | % | 31 |  | %
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 113 |  |  | 131 |  |  | 146 |  |  | 54 |  |  | 52 |  |  | (14 | ) | % | NM |  |
Securities purchased under agreements to resell (c) | 1,652 |  |  | 1,476 |  |  | 1,442 |  |  | 590 |  |  | (186 | ) |  | 12 |  | % | NM |  |
Interest-bearing cash | 1,484 |  |  | 1,226 |  |  | 2,456 |  |  | 4,235 |  |  | 1,027 |  |  | 21 |  | % | 44 |  | %
Total other earning assets | 3,249 |  |  | 2,833 |  |  | 4,044 |  |  | 4,879 |  |  | 893 |  |  | 15 |  | % | NM |  |
Interest income | $ | 292,369 |  |  | $ | 251,111 |  |  | $ | 238,351 |  |  | $ | 221,662 |  |  | $ | 223,091 |  |  | 16 |  | % | 31 |  | %
Interest Expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 4,977 |  |  | $ | 5,032 |  |  | $ | 5,448 |  |  | $ | 3,852 |  |  | $ | 2,926 |  |  | (1 | ) | % | 70 |  | %
Commercial interest | 7,220 |  |  | 4,970 |  |  | 4,797 |  |  | 3,927 |  |  | 3,102 |  |  | 45 |  | % | NM |  |
Market-indexed (d) | 12,272 |  |  | 10,266 |  |  | 8,941 |  |  | 8,407 |  |  | 5,968 |  |  | 20 |  | % | NM |  |
Total interest-bearing deposits | 24,469 |  |  | 20,268 |  |  | 19,186 |  |  | 16,186 |  |  | 11,996 |  |  | 21 |  | % | NM |  |
Federal funds purchased | 1,387 |  |  | 1,173 |  |  | 1,106 |  |  | 1,056 |  |  | 731 |  |  | 18 |  | % | 90 |  | %
Securities sold under agreements to repurchase | 1,175 |  |  | 1,815 |  |  | 1,081 |  |  | 89 |  |  | 47 |  |  | (35 | ) | % | NM |  |
Trading liabilities | 4,186 |  |  | 3,298 |  |  | 4,203 |  |  | 3,781 |  |  | 3,848 |  |  | 27 |  | % | 9 |  | %
Other short-term borrowings | 4,145 |  |  | 2,012 |  |  | 716 |  |  | 247 |  |  | 373 |  |  | NM |  |  | NM |  |
Term borrowings | 10,183 |  |  | 9,762 |  |  | 8,348 |  |  | 7,744 |  |  | 7,351 |  |  | 4 |  | % | 39 |  | %
Interest expense | 45,545 |  |  | 38,328 |  |  | 34,640 |  |  | 29,103 |  |  | 24,346 |  |  | 19 |  | % | 87 |  | %
Net interest income - tax equivalent basis | 246,824 |  |  | 212,783 |  |  | 203,711 |  |  | 192,559 |  |  | 198,745 |  |  | 16 |  | % | 24 |  | %
Fully taxable equivalent adjustment | (4,736 | ) |  | (2,966 | ) |  | (3,010 | ) |  | (2,851 | ) |  | (3,194 | ) |  | (60 | ) | % | (48 | ) | %
Net interest income | $ | 242,088 |  |  | $ | 209,817 |  |  | $ | 200,701 |  |  | $ | 189,708 |  |  | $ | 195,551 |  |  | 15 |  | % | 24 |  | %

NM - Not meaningful
(a) Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 35 percent and, where applicable, state income taxes.
(b) Includes interest on loans in nonaccrual status.
(c) 4Q16 driven by negative market rates on reverse repurchase agreements.
(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.
11

FHN CONSOLIDATED AVERAGE BALANCE SHEET: YIELDS AND RATES
Quarterly, Unaudited

| 4Q17 |  |  |  | 3Q17 |  |  |  | 2Q17 |  |  |  | 1Q17 |  |  |  | 4Q16 |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earning assets (a): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income (b): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans | 4.27 |  | % |  | 4.13 |  | % |  | 4.03 |  | % |  | 3.86 |  | % |  | 3.75 |  | %
Consumer loans | 4.33 |  |  |  | 4.23 |  |  |  | 4.21 |  |  |  | 4.13 |  |  |  | 4.06 |  |
Total loans, net of unearned income (c) | 4.28 |  |  |  | 4.16 |  |  |  | 4.08 |  |  |  | 3.94 |  |  |  | 3.84 |  |
Loans held-for-sale | 5.23 |  |  |  | 4.53 |  |  |  | 4.38 |  |  |  | 4.64 |  |  |  | 5.03 |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 2.56 |  |  |  | 2.54 |  |  |  | 2.57 |  |  |  | 2.59 |  |  |  | 2.43 |  |
States and municipalities | 7.04 |  |  |  | — |  |  |  | — |  |  |  | 9.33 |  |  |  | 9.39 |  |
Corporate bonds | 4.74 |  |  |  | 5.25 |  |  |  | 5.25 |  |  |  | 5.25 |  |  |  | 5.25 |  |
Other | 3.96 |  |  |  | 3.67 |  |  |  | 3.26 |  |  |  | 3.03 |  |  |  | 3.17 |  |
Total investment securities | 2.65 |  |  |  | 2.60 |  |  |  | 2.61 |  |  |  | 2.63 |  |  |  | 2.48 |  |
Trading securities | 3.14 |  |  |  | 3.06 |  |  |  | 3.07 |  |  |  | 2.84 |  |  |  | 2.69 |  |
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 1.79 |  |  |  | 1.75 |  |  |  | 1.58 |  |  |  | 1.28 |  |  |  | 1.07 |  |
Securities purchased under agreements to resell (d) | 0.80 |  |  |  | 0.88 |  |  |  | 0.69 |  |  |  | 0.35 |  |  |  | (0.09 | ) |
Interest-bearing cash | 1.28 |  |  |  | 1.24 |  |  |  | 1.02 |  |  |  | 0.81 |  |  |  | 0.57 |  |
Total other earning assets | 0.99 |  |  |  | 1.03 |  |  |  | 0.88 |  |  |  | 0.70 |  |  |  | 0.23 |  |
Interest income/total earning assets | 3.87 |  | % |  | 3.76 |  | % |  | 3.59 |  | % |  | 3.37 |  | % |  | 3.37 |  | %
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | 0.19 |  | % |  | 0.22 |  | % |  | 0.23 |  | % |  | 0.17 |  | % |  | 0.13 |  | %
Commercial interest | 0.78 |  |  |  | 0.69 |  |  |  | 0.62 |  |  |  | 0.51 |  |  |  | 0.44 |  |
Market-indexed (e) | 1.23 |  |  |  | 1.16 |  |  |  | 0.94 |  |  |  | 0.73 |  |  |  | 0.50 |  |
Total interest-bearing deposits | 0.54 |  |  |  | 0.51 |  |  |  | 0.47 |  |  |  | 0.39 |  |  |  | 0.29 |  |
Federal funds purchased | 1.29 |  |  |  | 1.24 |  |  |  | 1.02 |  |  |  | 0.77 |  |  |  | 0.55 |  |
Securities sold under agreements to repurchase | 0.78 |  |  |  | 1.06 |  |  |  | 0.70 |  |  |  | 0.09 |  |  |  | 0.05 |  |
Trading liabilities | 2.24 |  |  |  | 2.19 |  |  |  | 2.21 |  |  |  | 2.39 |  |  |  | 2.06 |  |
Other short-term borrowings | 1.32 |  |  |  | 1.22 |  |  |  | 1.30 |  |  |  | 1.24 |  |  |  | 0.61 |  |
Term borrowings (f) | 3.63 |  |  |  | 3.51 |  |  |  | 3.23 |  |  |  | 2.98 |  |  |  | 2.76 |  |
Interest expense/total interest-bearing liabilities | 0.82 |  |  |  | 0.80 |  |  |  | 0.72 |  |  |  | 0.60 |  |  |  | 0.51 |  |
Net interest spread | 3.05 |  | % |  | 2.96 |  | % |  | 2.87 |  | % |  | 2.77 |  | % |  | 2.86 |  | %
Effect of interest-free sources used to fund earning assets | 0.22 |  |  |  | 0.23 |  |  |  | 0.20 |  |  |  | 0.15 |  |  |  | 0.14 |  |
Net interest margin | 3.27 |  | % |  | 3.19 |  | % |  | 3.07 |  | % |  | 2.92 |  | % |  | 3.00 |  | %

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 35 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) 4Q16 driven by negative market rates on reverse repurchase agreements.
(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) Rates are expressed net of unamortized debenture cost for term borrowings.
12

FHN CAPITAL HIGHLIGHTS
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
(Dollars and shares in thousands) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16
Common equity tier 1 capital (a) (b) | $ | 2,906,544 |  |  | $ | 2,477,210 |  |  | $ | 2,418,578 |  |  | $ | 2,409,219 |  |  | $ | 2,377,987 |  |  | 17 |  | % | 22 |  | %
Tier 1 capital (a) (b) | 3,227,434 |  |  | 2,764,780 |  |  | 2,699,698 |  |  | 2,680,869 |  |  | 2,671,871 |  |  | 17 |  | % | 21 |  | %
Total capital (a) | 3,644,178 |  |  | 3,005,198 |  |  | 2,942,948 |  |  | 2,926,292 |  |  | 2,926,010 |  |  | 21 |  | % | 25 |  | %
Risk-weighted assets (“RWA”) (a) (b) | 33,492,100 |  |  | 24,678,030 |  |  | 24,566,487 |  |  | 23,623,224 |  |  | 23,914,158 |  |  | 36 |  | % | 40 |  | %
Average assets for leverage (a) (b) | 31,776,905 |  |  | 28,793,816 |  |  | 28,793,889 |  |  | 28,805,253 |  |  | 28,581,251 |  |  | 10 |  | % | 11 |  | %
Common equity tier 1 ratio (a) (b) | 8.68 |  | % | 10.04 |  | % | 9.85 |  | % | 10.20 |  | % | 9.94 |  | % |  |  |  |  |  |
Tier 1 ratio (a) (b) | 9.64 |  | % | 11.20 |  | % | 10.99 |  | % | 11.35 |  | % | 11.17 |  | % |  |  |  |  |  |
Total capital ratio (a) | 10.88 |  | % | 12.18 |  | % | 11.98 |  | % | 12.39 |  | % | 12.24 |  | % |  |  |  |  |  |
Leverage ratio (a) (b) | 10.16 |  | % | 9.60 |  | % | 9.38 |  | % | 9.31 |  | % | 9.35 |  | % |  |  |  |  |  |
Total equity to total assets | 11.06 |  | % | 9.73 |  | % | 9.63 |  | % | 9.25 |  | % | 9.47 |  | % |  |  |  |  |  |
Tangible common equity/tangible assets (“TCE/TA”) (c) | 6.57 |  | % | 7.54 |  | % | 7.41 |  | % | 7.27 |  | % | 7.42 |  | % |  |  |  |  |  |
Period-end shares outstanding | 326,736 |  |  | 234,231 |  |  | 234,135 |  |  | 233,883 |  |  | 233,624 |  |  | 39 |  | % | 40 |  | %
Cash dividends declared per common share | $ | 0.09 |  |  | $ | 0.09 |  |  | $ | 0.09 |  |  | $ | 0.09 |  |  | $ | 0.07 |  |  | * |  |  | 29 |  | %
Book value per common share | $ | 12.82 |  |  | $ | 10.64 |  |  | $ | 10.40 |  |  | $ | 10.05 |  |  | $ | 9.90 |  |  |  |  |  |  |  |
Tangible book value per common share (c) | $ | 8.01 |  |  | $ | 9.45 |  |  | $ | 9.20 |  |  | $ | 9.14 |  |  | $ | 9.00 |  |  |  |  |  |  |  |
Market capitalization (millions) | $ | 6,531.5 |  |  | $ | 4,485.5 |  |  | $ | 4,078.6 |  |  | $ | 4,326.8 |  |  | $ | 4,674.8 |  |  |  |  |  |  |  |

Certain previously reported amounts have been reclassified to agree with current presentation.
* Amount is less than one percent.
(a) Current quarter is an estimate; estimate does not include the favorable impact of reclassification from AOCI to retained earnings of approximately $58 million in connection with tax law change per bank regulatory guidance issued on January 18, 2018.
(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 22 of this financial supplement.
13

FHN BUSINESS SEGMENT HIGHLIGHTS
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  | 4Q17 Changes vs. | Twelve Months Ended |  | 2017 vs.
(Thousands) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  | 2016 |  | 2016
Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 244,272 |  |  | $ | 209,319 |  |  | $ | 201,972 |  |  | $ | 193,389 |  |  | $ | 200,717 |  |  | 17 |  | % | 22 |  | % |  | $ | 848,952 |  |  | $ | 741,852 |  |  |  | 14 |  | %
Noninterest income | 70,527 |  |  | 64,369 |  |  | 64,737 |  |  | 58,976 |  |  | 63,324 |  |  | 10 |  | % | 11 |  | % |  | 258,609 |  |  | 249,003 |  |  |  | 4 |  | %
Total revenues | 314,799 |  |  | 273,688 |  |  | 266,709 |  |  | 252,365 |  |  | 264,041 |  |  | 15 |  | % | 19 |  | % |  | 1,107,561 |  |  | 990,855 |  |  |  | 12 |  | %
Provision for loan losses | 9,737 |  |  | 8,552 |  |  | 260 |  |  | 3,098 |  |  | 4,692 |  |  | 14 |  | % | NM |  |  |  | 21,647 |  |  | 38,887 |  |  |  | (44 | ) | %
Noninterest expense (a) | 178,598 |  |  | 150,464 |  |  | 152,647 |  |  | 148,064 |  |  | 160,851 |  |  | 19 |  | % | 11 |  | % |  | 629,773 |  |  | 615,821 |  |  |  | 2 |  | %
Income before income taxes | 126,464 |  |  | 114,672 |  |  | 113,802 |  |  | 101,203 |  |  | 98,498 |  |  | 10 |  | % | 28 |  | % |  | 456,141 |  |  | 336,147 |  |  |  | 36 |  | %
Provision for income taxes | 43,999 |  |  | 41,267 |  |  | 41,131 |  |  | 36,588 |  |  | 35,364 |  |  | 7 |  | % | 24 |  | % |  | 162,985 |  |  | 120,100 |  |  |  | 36 |  | %
Net income | $ | 82,465 |  |  | $ | 73,405 |  |  | $ | 72,671 |  |  | $ | 64,615 |  |  | $ | 63,134 |  |  | 12 |  | % | 31 |  | % |  | $ | 293,156 |  |  | $ | 216,047 |  |  |  | 36 |  | %
Fixed Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 5,901 |  |  | $ | 5,979 |  |  | $ | 4,979 |  |  | $ | 1,151 |  |  | $ | 2,541 |  |  | (1 | ) | % | NM |  |  |  | $ | 18,010 |  |  | $ | 10,765 |  |  |  | 67 |  | %
Noninterest income | 55,248 |  |  | 55,802 |  |  | 55,205 |  |  | 50,822 |  |  | 52,061 |  |  | (1 | ) | % | 6 |  | % |  | 217,077 |  |  | 269,339 |  |  |  | (19 | ) | %
Total revenues | 61,149 |  |  | 61,781 |  |  | 60,184 |  |  | 51,973 |  |  | 54,602 |  |  | (1 | ) | % | 12 |  | % |  | 235,087 |  |  | 280,104 |  |  |  | (16 | ) | %
Noninterest expense | 55,146 |  |  | 53,105 |  |  | 54,001 |  |  | 48,685 |  |  | 48,726 |  |  | 4 |  | % | 13 |  | % |  | 210,937 |  |  | 229,576 |  |  |  | (8 | ) | %
Income before income taxes | 6,003 |  |  | 8,676 |  |  | 6,183 |  |  | 3,288 |  |  | 5,876 |  |  | (31 | ) | % | 2 |  | % |  | 24,150 |  |  | 50,528 |  |  |  | (52 | ) | %
Provision for income taxes | 1,970 |  |  | 2,979 |  |  | 1,946 |  |  | 1,024 |  |  | 1,875 |  |  | (34 | ) | % | 5 |  | % |  | 7,919 |  |  | 18,070 |  |  |  | (56 | ) | %
Net income | $ | 4,033 |  |  | $ | 5,697 |  |  | $ | 4,237 |  |  | $ | 2,264 |  |  | $ | 4,001 |  |  | (29 | ) | % | 1 |  | % |  | $ | 16,231 |  |  | $ | 32,458 |  |  |  | (50 | ) | %
Corporate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income/(expense) | $ | (15,855 | ) |  | $ | (13,990 | ) |  | $ | (14,970 | ) |  | $ | (14,100 | ) |  | $ | (17,501 | ) |  | (13 | ) | % | 9 |  | % |  | $ | (58,915 | ) |  | $ | (65,902 | ) |  |  | 11 |  | %
Noninterest income (b) | 6,709 |  |  | (9,477 | ) |  | 6,218 |  |  | 5,476 |  |  | 4,670 |  |  | NM |  |  | 44 |  | % |  | 8,926 |  |  | 20,436 |  |  |  | (56 | ) | %
Total revenues | (9,146 | ) |  | (23,467 | ) |  | (8,752 | ) |  | (8,624 | ) |  | (12,831 | ) |  | 61 |  | % | 29 |  | % |  | (49,989 | ) |  | (45,466 | ) |  |  | (10 | ) | %
Noninterest expense (c) | 74,000 |  |  | 23,935 |  |  | 24,575 |  |  | 16,880 |  |  | 14,593 |  |  | NM |  |  | NM |  |  |  | 139,390 |  |  | 58,913 |  |  |  | NM |  |
Loss before income taxes | (83,146 | ) |  | (47,402 | ) |  | (33,327 | ) |  | (25,504 | ) |  | (27,424 | ) |  | (75 | ) | % | NM |  |  |  | (189,379 | ) |  | (104,379 | ) |  |  | (81 | ) | %
Provision/(benefit) for income taxes (d) | 37,097 |  |  | (34,255 | ) |  | (35,706 | ) |  | (13,058 | ) |  | (15,082 | ) |  | NM |  |  | NM |  |  |  | (45,922 | ) |  | (55,777 | ) |  |  | 18 |  | %
Net income/(loss) | $ | (120,243 | ) |  | $ | (13,147 | ) |  | $ | 2,379 |  |  | $ | (12,446 | ) |  | $ | (12,342 | ) |  | NM |  |  | NM |  |  |  | $ | (143,457 | ) |  | $ | (48,602 | ) |  |  | NM |  |
Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 7,770 |  |  | $ | 8,509 |  |  | $ | 8,720 |  |  | $ | 9,268 |  |  | $ | 9,794 |  |  | (9 | ) | % | (21 | ) | % |  | $ | 34,267 |  |  | $ | 42,369 |  |  |  | (19 | ) | %
Noninterest income (e) | 706 |  |  | 1,723 |  |  | 1,513 |  |  | 1,665 |  |  | 4,022 |  |  | (59 | ) | % | (82 | ) | % |  | 5,607 |  |  | 13,663 |  |  |  | (59 | ) | %
Total revenues | 8,476 |  |  | 10,232 |  |  | 10,233 |  |  | 10,933 |  |  | 13,816 |  |  | (17 | ) | % | (39 | ) | % |  | 39,874 |  |  | 56,032 |  |  |  | (29 | ) | %
Provision/(provision credit) for loan losses | (6,737 | ) |  | (8,552 | ) |  | (2,260 | ) |  | (4,098 | ) |  | (4,692 | ) |  | 21 |  | % | (44 | ) | % |  | (21,647 | ) |  | (27,887 | ) |  |  | 22 |  | %
Noninterest expense (f) | 38,926 |  |  | 9,365 |  |  | (13,306 | ) |  | 8,576 |  |  | 13,727 |  |  | NM |  |  | NM |  |  |  | 43,561 |  |  | 20,894 |  |  |  | NM |  |
Income/(loss) before income taxes | (23,713 | ) |  | 9,419 |  |  | 25,799 |  |  | 6,455 |  |  | 4,781 |  |  | NM |  |  | NM |  |  |  | 17,960 |  |  | 63,025 |  |  |  | (72 | ) | %
Provision/(benefit) for income taxes | (9,077 | ) |  | 3,605 |  |  | 9,882 |  |  | 2,500 |  |  | 1,851 |  |  | NM |  |  | NM |  |  |  | 6,910 |  |  | 24,417 |  |  |  | (72 | ) | %
Net income/(loss) | $ | (14,636 | ) |  | $ | 5,814 |  |  | $ | 15,917 |  |  | $ | 3,955 |  |  | $ | 2,930 |  |  | NM |  |  | NM |  |  |  | $ | 11,050 |  |  | $ | 38,608 |  |  |  | (71 | ) | %
Total Consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 242,088 |  |  | $ | 209,817 |  |  | $ | 200,701 |  |  | $ | 189,708 |  |  | $ | 195,551 |  |  | 15 |  | % | 24 |  | % |  | $ | 842,314 |  |  | $ | 729,084 |  |  |  | 16 |  | %
Noninterest income | 133,190 |  |  | 112,417 |  |  | 127,673 |  |  | 116,939 |  |  | 124,077 |  |  | 18 |  | % | 7 |  | % |  | 490,219 |  |  | 552,441 |  |  |  | (11 | ) | %
Total revenues | 375,278 |  |  | 322,234 |  |  | 328,374 |  |  | 306,647 |  |  | 319,628 |  |  | 16 |  | % | 17 |  | % |  | 1,332,533 |  |  | 1,281,525 |  |  |  | 4 |  | %
Provision/(provision credit) for loan losses | 3,000 |  |  | — |  |  | (2,000 | ) |  | (1,000 | ) |  | — |  |  | NM |  |  | NM |  |  |  | — |  |  | 11,000 |  |  |  | NM |  |
Noninterest expense | 346,670 |  |  | 236,869 |  |  | 217,917 |  |  | 222,205 |  |  | 237,897 |  |  | 46 |  | % | 46 |  | % |  | 1,023,661 |  |  | 925,204 |  |  |  | 11 |  | %
Income before income taxes | 25,608 |  |  | 85,365 |  |  | 112,457 |  |  | 85,442 |  |  | 81,731 |  |  | (70 | ) | % | (69 | ) | % |  | 308,872 |  |  | 345,321 |  |  |  | (11 | ) | %
Provision for income taxes | 73,989 |  |  | 13,596 |  |  | 17,253 |  |  | 27,054 |  |  | 24,008 |  |  | NM |  |  | NM |  |  |  | 131,892 |  |  | 106,810 |  |  |  | 23 |  | %
Net income/(loss) | $ | (48,381 | ) |  | $ | 71,769 |  |  | $ | 95,204 |  |  | $ | 58,388 |  |  | $ | 57,723 |  |  | NM |  |  | NM |  |  |  | $ | 176,980 |  |  | $ | 238,511 |  |  |  | (26 | ) | %

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not meaningful

(a) | 4Q17 includes $4.1 million of special employee bonuses; 3Q17 includes $4.4 million of loss accruals related to legal matters; 4Q16 includes $2.7 million of loss accruals related to legal matters.

(b) | 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.

(c) | 4Q17 includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisition, $5.7 million of special employee bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gain; 3Q17 includes $8.2 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions; 2Q17 includes $6.4 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions and a $3.2 million charitable contribution to the First Tennessee Foundation.

(d) | 4Q17 increase primarily associated with the effects of the Tax Act; 4Q17, 3Q17 and 2Q17 include the impact of a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance.

(e) | 4Q16 includes a $1.5 million gain related to the reversal of a contingency accrual associated with prior sales of MSR.

(f) | 4Q17 includes $32.0 million of loss accruals related to legal matters; 3Q17 includes $3.6 million of loss accruals related to legal matters; 2Q17 includes a $21.7 million reversal of repurchase and foreclosure provision as a result of the settlements/ recoveries of certain repurchase claims; 4Q16 includes $2.0 million of loss accruals related to legal matters.

14

FHN REGIONAL BANKING
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs. |  | Twelve Months Ended |  | 2017 vs.
| 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  | 2016 |  | 2016
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 244,272 |  |  | $ | 209,319 |  |  | $ | 201,972 |  |  | $ | 193,389 |  |  | $ | 200,717 |  |  | 17 | % | 22 | % |  | $ | 848,952 |  |  | $ | 741,852 |  |  |  | 14 |  | %
Provision for loan losses | 9,737 |  |  | 8,552 |  |  | 260 |  |  | 3,098 |  |  | 4,692 |  |  | 14 | % | NM |  |  | 21,647 |  |  | 38,887 |  |  |  | (44 | ) | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NSF / Overdraft fees (a) | 10,111 |  |  | 9,888 |  |  | 8,726 |  |  | 6,316 |  |  | 9,707 |  |  | 2 | % | 4 | % |  | 35,041 |  |  | 38,264 |  |  |  | (8 | ) | %
Cash management fees | 9,396 |  |  | 8,923 |  |  | 9,641 |  |  | 9,196 |  |  | 8,659 |  |  | 5 | % | 9 | % |  | 37,155 |  |  | 33,979 |  |  |  | 9 |  | %
Debit card income | 3,688 |  |  | 3,638 |  |  | 3,658 |  |  | 3,407 |  |  | 3,516 |  |  | 1 | % | 5 | % |  | 14,391 |  |  | 13,697 |  |  |  | 5 |  | %
Other | 5,697 |  |  | 4,189 |  |  | 4,424 |  |  | 4,327 |  |  | 4,291 |  |  | 36 | % | 33 | % |  | 18,638 |  |  | 17,259 |  |  |  | 8 |  | %
Total deposit transactions and cash management | 28,892 |  |  | 26,638 |  |  | 26,449 |  |  | 23,246 |  |  | 26,173 |  |  | 8 | % | 10 | % |  | 105,225 |  |  | 103,199 |  |  |  | 2 |  | %
Brokerage, management fees and commissions | 12,642 |  |  | 11,936 |  |  | 12,029 |  |  | 11,906 |  |  | 11,003 |  |  | 6 | % | 15 | % |  | 48,513 |  |  | 42,911 |  |  |  | 13 |  | %
Trust services and investment management | 7,131 |  |  | 6,968 |  |  | 7,713 |  |  | 6,680 |  |  | 7,056 |  |  | 2 | % | 1 | % |  | 28,491 |  |  | 27,764 |  |  |  | 3 |  | %
Bankcard income | 8,125 |  |  | 6,057 |  |  | 5,495 |  |  | 5,342 |  |  | 6,230 |  |  | 34 | % | 30 | % |  | 25,020 |  |  | 23,945 |  |  |  | 4 |  | %
Other service charges | 3,096 |  |  | 2,603 |  |  | 2,722 |  |  | 2,618 |  |  | 2,596 |  |  | 19 | % | 19 | % |  | 11,039 |  |  | 10,084 |  |  |  | 9 |  | %
Miscellaneous revenue (b) | 10,641 |  |  | 10,167 |  |  | 10,329 |  |  | 9,184 |  |  | 10,266 |  |  | 5 | % | 4 | % |  | 40,321 |  |  | 41,100 |  |  |  | (2 | ) | %
Total noninterest income | 70,527 |  |  | 64,369 |  |  | 64,737 |  |  | 58,976 |  |  | 63,324 |  |  | 10 | % | 11 | % |  | 258,609 |  |  | 249,003 |  |  |  | 4 |  | %
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation, incentives, and benefits (c) | 71,636 |  |  | 56,387 |  |  | 58,487 |  |  | 57,990 |  |  | 58,627 |  |  | 27 | % | 22 | % |  | 244,500 |  |  | 220,653 |  |  |  | 11 |  | %
Other (d) | 106,962 |  |  | 94,077 |  |  | 94,160 |  |  | 90,074 |  |  | 102,224 |  |  | 14 | % | 5 | % |  | 385,273 |  |  | 395,168 |  |  |  | (3 | ) | %
Total noninterest expense | 178,598 |  |  | 150,464 |  |  | 152,647 |  |  | 148,064 |  |  | 160,851 |  |  | 19 | % | 11 | % |  | 629,773 |  |  | 615,821 |  |  |  | 2 |  | %
Income before income taxes | $ | 126,464 |  |  | $ | 114,672 |  |  | $ | 113,802 |  |  | $ | 101,203 |  |  | $ | 98,498 |  |  | 10 | % | 28 | % |  | $ | 456,141 |  |  | $ | 336,147 |  |  |  | 36 |  | %
PPNR (e) | 136,201 |  |  | 123,224 |  |  | 113,676 |  |  | 104,301 |  |  | 103,190 |  |  | 11 | % | 32 | % |  | 477,788 |  |  | 375,034 |  |  |  | 27 |  | %
Efficiency ratio (f) | 56.73 |  | % | 54.98 |  | % | 57.32 |  | % | 58.67 |  | % | 60.92 |  | % |  |  |  |  |  | 56.86 |  | % | 62.15 |  | % |  |  |  |
Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average loans | $ | 21,146 |  |  | $ | 18,402 |  |  | $ | 17,679 |  |  | $ | 17,199 |  |  | $ | 17,692 |  |  | 15 | % | 20 | % |  | $ | 18,617 |  |  | $ | 16,409 |  |  |  | 13 |  | %
Average other earning assets | 87 |  |  | 44 |  |  | 50 |  |  | 34 |  |  | 37 |  |  | 98 | % | NM |  |  | 54 |  |  | 44 |  |  |  | 23 |  | %
Total average earning assets | 21,233 |  |  | 18,446 |  |  | 17,729 |  |  | 17,233 |  |  | 17,729 |  |  | 15 | % | 20 | % |  | 18,671 |  |  | 16,453 |  |  |  | 13 |  | %
Total average deposits | 22,390 |  |  | 20,075 |  |  | 20,139 |  |  | 19,660 |  |  | 19,022 |  |  | 12 | % | 18 | % |  | 20,572 |  |  | 18,513 |  |  |  | 11 |  | %
Total period-end deposits | 27,555 |  |  | 20,084 |  |  | 20,425 |  |  | 20,541 |  |  | 19,348 |  |  | 37 | % | 42 | % |  | 27,555 |  |  | 19,348 |  |  |  | 42 |  | %
Total period-end assets | 30,148 |  |  | 19,600 |  |  | 19,333 |  |  | 18,329 |  |  | 18,771 |  |  | 54 | % | 61 | % |  | 30,148 |  |  | 18,771 |  |  |  | 61 |  | %
Net interest margin (g) | 4.65 |  | % | 4.56 |  | % | 4.63 |  | % | 4.61 |  | % | 4.57 |  | % |  |  |  |  |  | 4.61 |  | % | 4.57 |  | % |  |  |  |
Net interest spread | 3.86 |  |  | 3.72 |  |  | 3.62 |  |  | 3.57 |  |  | 3.52 |  |  |  |  |  |  |  | 3.70 |  |  | 3.46 |  |  |  |  |  |
Loan yield | 4.15 |  |  | 4.00 |  |  | 3.88 |  |  | 3.78 |  |  | 3.68 |  |  |  |  |  |  |  | 3.96 |  |  | 3.61 |  |  |  |  |  |
Deposit average rate | 0.29 |  |  | 0.28 |  |  | 0.26 |  |  | 0.21 |  |  | 0.16 |  |  |  |  |  |  |  | 0.26 |  |  | 0.15 |  |  |  |  |  |
Key Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial center locations | 347 |  |  | 163 |  |  | 163 |  |  | 162 |  |  | 162 |  |  | NM |  | NM |  |  |  |  |  |  |  |  |  |  |  |

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; 1Q17 decrease driven by seasonality and a modification of billing practices.

(b) | 2Q17 includes $386 thousand of securities gains/(losses).

(c) | 4Q17 includes $4.1 million of special employee bonuses.

(d) | 3Q17 includes $4.4 million of loss accruals related to legal matters; 4Q16 includes $2.7 million of loss accruals related to legal matters.

(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) | Noninterest expense divided by total revenue excluding securities gains/(losses).

(g) | Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.

15

FHN FIXED INCOME
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs. |  | Twelve Months Ended |  | 2017 vs.
| 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  |  | 2016 |  |  | 2016
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income (a) | $ | 5,901 |  |  | $ | 5,979 |  |  | $ | 4,979 |  |  | $ | 1,151 |  |  | $ | 2,541 |  |  | (1) | % | NM |  |  | $ | 18,010 |  |  | $ | 10,765 |  |  |  | 67 | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income product revenue | 40,608 |  |  | 45,020 |  |  | 45,555 |  |  | 42,727 |  |  | 43,794 |  |  | (10) | % | (7) | % |  | 173,910 |  |  | 229,659 |  |  |  | (24) | %
Other | 14,640 |  |  | 10,782 |  |  | 9,650 |  |  | 8,095 |  |  | 8,267 |  |  | 36 | % | 77 | % |  | 43,167 |  |  | 39,680 |  |  |  | 9 | %
Total noninterest income | 55,248 |  |  | 55,802 |  |  | 55,205 |  |  | 50,822 |  |  | 52,061 |  |  | (1) | % | 6 | % |  | 217,077 |  |  | 269,339 |  |  |  | (19) | %
Noninterest expense | 55,146 |  |  | 53,105 |  |  | 54,001 |  |  | 48,685 |  |  | 48,726 |  |  | 4 | % | 13 | % |  | 210,937 |  |  | 229,576 |  |  |  | (8) | %
Income before income taxes | $ | 6,003 |  |  | $ | 8,676 |  |  | $ | 6,183 |  |  | $ | 3,288 |  |  | $ | 5,876 |  |  | (31) | % | 2 | % |  | $ | 24,150 |  |  | $ | 50,528 |  |  |  | (52) | %
Efficiency ratio (b) | 90.18 |  | % | 85.96 |  | % | 89.73 |  | % | 93.67 |  | % | 89.24 |  | % |  |  |  |  |  | 89.73 |  | % | 81.96 |  | % |  |  |
Fixed income product average daily revenue | $ | 655 |  |  | $ | 715 |  |  | $ | 723 |  |  | $ | 689 |  |  | $ | 718 |  |  | (8) | % | (9) | % |  | $ | 696 |  |  | $ | 919 |  |  |  | (24) | %
Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average trading inventory (a) | $ | 1,437 |  |  | $ | 1,122 |  |  | $ | 1,281 |  |  | $ | 927 |  |  | $ | 1,281 |  |  | 28 | % | 12 | % |  | $ | 1,193 |  |  | $ | 1,210 |  |  |  | (1) | %
Average loans held-for-sale (a) | 363 |  |  | 443 |  |  | 220 |  |  | 7 |  |  | 20 |  |  | (18) | % | NM |  |  | 259 |  |  | 12 |  |  |  | NM |
Average other earning assets | 850 |  |  | 690 |  |  | 851 |  |  | 696 |  |  | 798 |  |  | 23 | % | 7 | % |  | 773 |  |  | 829 |  |  |  | (7) | %
Total average earning assets | 2,650 |  |  | 2,255 |  |  | 2,352 |  |  | 1,630 |  |  | 2,099 |  |  | 18 | % | 26 | % |  | 2,225 |  |  | 2,051 |  |  |  | 8 | %
Total period-end assets | 2,990 |  |  | 2,751 |  |  | 2,745 |  |  | 2,395 |  |  | 1,817 |  |  | 9 | % | 65 | % |  | 2,990 |  |  | 1,817 |  |  |  | 65 | %
Net interest margin (c) | 0.94 |  | % | 1.12 |  | % | 0.92 |  | % | 0.33 |  | % | 0.57 |  | % |  |  |  |  |  | 0.87 |  | % | 0.60 |  | % |  |  |

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not meaningful
(a) 2Q17 increase driven by the Coastal acquisition.
(b) Noninterest expense divided by total revenue.
(c) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where
applicable, state income taxes.
FHN CORPORATE
Quarterly, Unaudited

|  | 4Q17 Changes vs. |  | Twelve months ended |  | 2017 vs.
| 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  |  | 2016 |  |  |  | 2016
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income/(expense) | $ | (15,855 | ) |  | $ | (13,990 | ) |  | $ | (14,970 | ) |  | $ | (14,100 | ) |  | $ | (17,501 | ) |  | (13 | ) | % | 9 |  | % |  | $ | (58,915 | ) |  | $ | (65,902 | ) |  |  | 11 |  | %
Noninterest income excluding securities gains/(losses) (a) | 6,572 |  |  | (9,483 | ) |  | 6,199 |  |  | 5,432 |  |  | 4,802 |  |  | NM |  |  | 37 |  | % |  | 8,720 |  |  | 19,095 |  |  |  | (54 | ) | %
Securities gains/(losses), net | 137 |  |  | 6 |  |  | 19 |  |  | 44 |  |  | (132 | ) |  | NM |  |  | NM |  |  |  | 206 |  |  | 1,341 |  |  |  | (85 | ) | %
Noninterest expense (b) | 74,000 |  |  | 23,935 |  |  | 24,575 |  |  | 16,880 |  |  | 14,593 |  |  | NM |  |  | NM |  |  |  | 139,390 |  |  | 58,913 |  |  |  | NM |  |
Loss before income taxes | $ | (83,146 | ) |  | $ | (47,402 | ) |  | $ | (33,327 | ) |  | $ | (25,504 | ) |  | $ | (27,424 | ) |  | (75 | ) | % | NM |  |  |  | $ | (189,379 | ) |  | $ | (104,379 | ) |  |  | (81 | ) | %
Average Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average investment securities | $ | 4,273 |  |  | $ | 3,959 |  |  | $ | 3,950 |  |  | $ | 3,931 |  |  | $ | 4,007 |  |  | 8 |  | % | 7 |  | % |  | $ | 4,029 |  |  | $ | 4,012 |  |  |  | * |  |
Total earning assets | $ | 4,792 |  |  | $ | 4,408 |  |  | $ | 4,983 |  |  | $ | 6,122 |  |  | $ | 4,795 |  |  | 9 |  | % | * |  |  |  | $ | 5,071 |  |  | $ | 4,770 |  |  |  | 6 |  | %

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not Meaningful
* Amount is less than one percent.
(a) 4Q17 includes a $1.3 million gain related to BOLI policy benefits; 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.
(b) 4Q17 includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisition, $5.7 million of special employee bonuses, and a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gains; 3Q17 includes $8.2 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions; 2Q17 includes $6.4 million of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions and a $3.2 million charitable contribution to the First Tennessee Foundation, somewhat offset by $2.2 million of deferred compensation BOLI gains.
16

FHN NON-STRATEGIC
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs. | Twelve Months Ended |  | 2017 vs.
|  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 3Q17 | 4Q16 |  | 2017 |  |  | 2016 |  |  | 2016
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 7,770 |  |  | $ | 8,509 |  |  | $ | 8,720 |  |  | $ | 9,268 |  |  | $ | 9,794 |  |  | (9 | ) | % | (21 | ) | % |  | $ | 34,267 |  |  | $ | 42,369 |  |  | (19) | %
Provision/(provision credit) for loan losses |  | (6,737 | ) |  | (8,552 | ) |  | (2,260 | ) |  | (4,098 | ) |  | (4,692 | ) |  | 21 |  | % | (44 | ) | % |  | (21,647 | ) |  | (27,887 | ) |  | 22 | %
Noninterest income (a) |  | 706 |  |  | 1,723 |  |  | 1,513 |  |  | 1,665 |  |  | 4,022 |  |  | (59 | ) | % | (82 | ) | % |  | 5,607 |  |  | 13,663 |  |  | (59) | %
Noninterest expense (b) |  | 38,926 |  |  | 9,365 |  |  | (13,306 | ) |  | 8,576 |  |  | 13,727 |  |  | NM |  |  | NM |  |  |  | 43,561 |  |  | 20,894 |  |  | NM |
Income/(loss) before income taxes |  | $ | (23,713 | ) |  | $ | 9,419 |  |  | $ | 25,799 |  |  | $ | 6,455 |  |  | $ | 4,781 |  |  | NM |  |  | NM |  |  |  | $ | 17,960 |  |  | $ | 63,025 |  |  | (72) | %
Average Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 1,282 |  |  | $ | 1,358 |  |  | $ | 1,441 |  |  | $ | 1,535 |  |  | $ | 1,636 |  |  | (6 | ) | % | (22 | ) | % |  | $ | 1,403 |  |  | $ | 1,800 |  |  | (22) | %
Other assets |  | 72 |  |  | 73 |  |  | 80 |  |  | 81 |  |  | 86 |  |  | (1 | ) | % | (16 | ) | % |  | 77 |  |  | 88 |  |  | (13) | %
Total assets |  | 1,354 |  |  | 1,431 |  |  | 1,521 |  |  | 1,616 |  |  | 1,722 |  |  | (5 | ) | % | (21 | ) | % |  | 1,480 |  |  | 1,888 |  |  | (22) | %
Net interest margin (c) |  | 2.26 |  | % | 2.34 |  | % | 2.27 |  | % | 2.29 |  | % | 2.25 |  | % |  |  |  |  |  |  |  | 2.29 |  | % | 2.22 |  | % |  |
Efficiency ratio (d) |  | NM |  |  | 91.53 |  | % | NM |  |  | 78.44 |  | % | 99.36 |  | % |  |  |  |  |  |  |  | NM |  |  | 37.29 |  | % |  |

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not meaningful
(a) 4Q16 includes a $1.5 million gain related to the reversal of a contingency accrual associated with prior sales of MSR.
(b) 4Q17 includes $32.0 million of loss accruals related to legal matters; 3Q17 includes $3.6 million of loss accruals related to legal matters; 2Q17 includes a $21.7 million reversal of repurchase and foreclosure provision as a result of the settlements/ recoveries of certain repurchase claims; 4Q16 includes $2.0 million of loss accruals related to legal matters.
(c) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 35 percent and, where applicable, state income taxes.
(d) Noninterest expense divided by total revenue excluding securities gains/(losses).
17

FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
(Dollars in thousands) |  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q16 |  | 3Q17 |  | 4Q16
Allowance for Loan Losses Walk-Forward |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning reserve |  | $ | 194,867 |  |  | $ | 197,257 |  |  | $ | 201,968 |  |  | $ | 202,068 |  |  | $ | 201,557 |  |  | (1)% |  | (3)%
Provision/(provision credit) for loan losses |  | 3,000 |  |  | — |  |  | (2,000 | ) |  | (1,000 | ) |  | — |  |  | NM |  | NM
Charge-offs |  | (17,481 | ) |  | (10,670 | ) |  | (9,830 | ) |  | (8,413 | ) |  | (11,369 | ) |  | (64)% |  | (54)%
Recoveries |  | 9,169 |  |  | 8,280 |  |  | 7,119 |  |  | 9,313 |  |  | 11,880 |  |  | 11% |  | (23)%
Ending balance |  | $ | 189,555 |  |  | $ | 194,867 |  |  | $ | 197,257 |  |  | $ | 201,968 |  |  | $ | 202,068 |  |  | (3)% |  | (6)%
Reserve for unfunded commitments |  | 5,079 |  |  | 4,372 |  |  | 5,554 |  |  | 5,284 |  |  | 5,312 |  |  | 16% |  | (4)%
Total allowance for loan losses plus reserve for unfunded commitments |  | $ | 194,634 |  |  | $ | 199,239 |  |  | $ | 202,811 |  |  | $ | 207,252 |  |  | $ | 207,380 |  |  | (2)% |  | (6)%
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  | $ | 154,111 |  |  | $ | 156,021 |  |  | $ | 153,208 |  |  | $ | 155,968 |  |  | $ | 154,082 |  |  | (1)% |  | *
Non-Strategic |  | 35,444 |  |  | 38,846 |  |  | 44,049 |  |  | 46,000 |  |  | 47,986 |  |  | (9)% |  | (26)%
Total allowance for loan losses |  | $ | 189,555 |  |  | $ | 194,867 |  |  | $ | 197,257 |  |  | $ | 201,968 |  |  | $ | 202,068 |  |  | (3)% |  | (6)%
Nonperforming Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 52,659 |  |  | $ | 40,610 |  |  | $ | 43,012 |  |  | $ | 49,462 |  |  | $ | 50,653 |  |  | 30% |  | 4%
OREO (a) |  | 34,844 |  |  | 2,848 |  |  | 3,266 |  |  | 4,422 |  |  | 5,081 |  |  | NM |  | NM
Total Regional Banking |  | $ | 87,503 |  |  | $ | 43,458 |  |  | $ | 46,278 |  |  | $ | 53,884 |  |  | $ | 55,734 |  |  | NM |  | 57%
Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 75,803 |  |  | $ | 82,203 |  |  | $ | 84,959 |  |  | $ | 92,409 |  |  | $ | 93,808 |  |  | (8)% |  | (19)%
Nonperforming loans held-for-sale after fair value adjustments |  | 6,971 |  |  | 7,314 |  |  | 7,321 |  |  | 7,633 |  |  | 7,741 |  |  | (5)% |  | (10)%
OREO (a) |  | 4,722 |  |  | 5,029 |  |  | 3,772 |  |  | 5,837 |  |  | 6,154 |  |  | (6)% |  | (23)%
Total Non-Strategic |  | $ | 87,496 |  |  | $ | 94,546 |  |  | $ | 96,052 |  |  | $ | 105,879 |  |  | $ | 107,703 |  |  | (7)% |  | (19)%
Corporate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 2,157 |  |  | $ | 2,173 |  |  | $ | 1,819 |  |  | $ | 1,521 |  |  | $ | 1,186 |  |  | (1)% |  | 82%
Total nonperforming assets (a) |  | $ | 177,156 |  |  | $ | 140,177 |  |  | $ | 144,149 |  |  | $ | 161,284 |  |  | $ | 164,623 |  |  | 26% |  | 8%
Net Charge-Offs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  | $ | 11,647 |  |  | $ | 5,739 |  |  | $ | 3,020 |  |  | $ | 1,211 |  |  | $ | 2,007 |  |  | NM |  | NM
Non-Strategic |  | (3,335 | ) |  | (3,349 | ) |  | (309 | ) |  | (2,111 | ) |  | (2,518 | ) |  | * |  | (32)%
Total net charge-offs/(recoveries) |  | $ | 8,312 |  |  | $ | 2,390 |  |  | $ | 2,711 |  |  | $ | (900 | ) |  | $ | (511 | ) |  | NM |  | NM
Consolidated Key Ratios (b) (c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30+ Delinq. % (d) |  | 0.33 |  | % |  |  | 0.38 |  | % |  |  | 0.27 |  | % |  |  | 0.39 |  | % |  |  | 0.34 |  | % |  |  |  |  |
NPL % |  | 0.47 |  |  |  | 0.62 |  |  |  | 0.65 |  |  |  | 0.75 |  |  |  | 0.74 |  |  |  |  |  |
NPA % |  | 0.61 |  |  |  | 0.66 |  |  |  | 0.68 |  |  |  | 0.80 |  |  |  | 0.80 |  |  |  |  |  |
Net charge-offs % |  | 0.15 |  |  |  | 0.05 |  |  |  | 0.06 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % (e) |  | 0.69 |  |  |  | 0.97 |  |  |  | 0.99 |  |  |  | 1.06 |  |  |  | 1.03 |  |  |  |  |  |
Allowance / NPL |  | 1.45 |  | x |  |  | 1.56 |  | x |  |  | 1.52 |  | x |  |  | 1.41 |  | x |  |  | 1.39 |  | x |  |  |  |  |
Allowance / NPA |  | 1.11 |  | x |  |  | 1.47 |  | x |  |  | 1.44 |  | x |  |  | 1.31 |  | x |  |  | 1.29 |  | x |  |  |  |  |
Allowance / net charge-offs |  | 5.75 |  | x |  |  | 20.55 |  | x |  |  | 18.14 |  | x |  |  | NM |  |  |  |  | NM |  |  |  |  |  |  |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans past due 90 days or more and still accruing (f) |  | $ | 48,047 |  |  | $ | 41,025 |  |  | $ | 37,809 |  |  | $ | 37,156 |  |  | $ | 38,299 |  |  | 17% |  | 25%
Guaranteed portion (f) |  | 9,454 |  |  | 10,046 |  |  | 15,276 |  |  | 14,569 |  |  | 14,664 |  |  | (6)% |  | (36)%
Period-end loans, net of unearned income (millions) |  | 27,659 |  |  | 20,166 |  |  | 19,989 |  |  | 19,090 |  |  | 19,590 |  |  | 37% |  | 41%

NM - Not meaningful
* Amount is less than one percent.
(a) Excludes OREO from government-insured mortgages.
(b) See Glossary of Terms for definitions of Consolidated Key Ratios.
(c) 4Q17 Asset Quality ratios were impacted by the addition of approximately $7.4 billion in loans as a result of the Capital Bank acquisition.
(d) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(e) The decrease in allowance to loans reflects the addition of loans acquired from Capital Bank at fair value which includes an estimate of life of loan credit losses.
(f) Includes loans held-for-sale.
18

FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
|  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q16 |  | 3Q17 |  | 4Q16
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 16,057 |  |  |  | $ | 12,792 |  |  |  | $ | 12,598 |  |  |  | $ | 11,704 |  |  |  | $ | 12,148 |  |  |  | 26% |  | 32%
30+ Delinq. % (a) (b) (c) |  | 0.19 |  | % |  | 0.27 |  | % |  | 0.03 |  | % |  | 0.17 |  | % |  | 0.08 |  | % |  |  |  |
NPL % |  | 0.19 |  |  |  | 0.15 |  |  |  | 0.20 |  |  |  | 0.26 |  |  |  | 0.27 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.28 |  |  |  | 0.10 |  |  |  | 0.04 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.61 |  | % |  | 0.77 |  | % |  | 0.73 |  | % |  | 0.80 |  | % |  | 0.74 |  | % |  |  |  |
Allowance / net charge-offs |  | 2.53 |  | x |  | 7.97 |  | x |  | 18.21 |  | x |  | NM |  |  |  | NM |  |  |  |  |  |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 4,215 |  |  |  | $ | 2,251 |  |  |  | $ | 2,212 |  |  |  | $ | 2,173 |  |  |  | $ | 2,136 |  |  |  | 87% |  | 97%
30+ Delinq. % (a) |  | 0.11 |  | % |  | 0.02 |  | % |  | 0.01 |  | % |  | 0.03 |  | % |  | 0.01 |  | % |  |  |  |
NPL % |  | 0.03 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.11 |  |  |  | 0.13 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | 0.09 |  |  |  |  |  |
Allowance / loans % |  | 0.67 |  | % |  | 1.32 |  | % |  | 1.38 |  | % |  | 1.42 |  | % |  | 1.59 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | 17.56 |  | x |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 6,368 |  |  |  | $ | 4,370 |  |  |  | $ | 4,417 |  |  |  | $ | 4,457 |  |  |  | $ | 4,524 |  |  |  | 46% |  | 41%
30+ Delinq. % (a) |  | 0.65 |  | % |  | 0.74 |  | % |  | 0.81 |  | % |  | 0.86 |  | % |  | 0.93 |  | % |  |  |  |
NPL % |  | 1.12 |  |  |  | 1.76 |  |  |  | 1.70 |  |  |  | 1.83 |  |  |  | 1.83 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.59 |  | % |  | 0.94 |  | % |  | 1.04 |  | % |  | 1.11 |  | % |  | 1.11 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 399 |  |  |  | $ | 403 |  |  |  | $ | 408 |  |  |  | $ | 409 |  |  |  | $ | 423 |  |  |  | (1)% |  | (6)%
30+ Delinq. % (a) |  | 1.85 |  | % |  | 1.51 |  | % |  | 2.57 |  | % |  | 2.57 |  | % |  | 2.36 |  | % |  |  |  |
NPL % |  | 6.61 |  |  |  | 6.81 |  |  |  | 6.81 |  |  |  | 7.05 |  |  |  | 6.42 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.10 |  |  |  | NM |  |  |  | 0.35 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 3.90 |  | % |  | 3.90 |  | % |  | 4.02 |  | % |  | 3.88 |  | % |  | 3.85 |  | % |  |  |  |
Allowance / net charge-offs |  | 37.67 |  | x |  | NM |  |  |  | 11.52 |  | x |  | NM |  |  |  | NM |  |  |  |  |  |
Credit Card and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 620 |  |  |  | $ | 350 |  |  |  | $ | 354 |  |  |  | $ | 347 |  |  |  | $ | 359 |  |  |  | 77% |  | 73%
30+ Delinq. % (a) |  | 1.24 |  | % |  | 0.89 |  | % |  | 0.92 |  | % |  | 1.00 |  | % |  | 1.17 |  | % |  |  |  |
NPL % |  | 0.03 |  |  |  | 0.04 |  |  |  | 0.04 |  |  |  | 0.04 |  |  |  | 0.04 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 2.30 |  |  |  | 2.80 |  |  |  | 2.71 |  |  |  | 3.08 |  |  |  | 3.25 |  |  |  |  |  |
Allowance / loans % |  | 1.61 |  | % |  | 2.95 |  | % |  | 3.38 |  | % |  | 3.58 |  | % |  | 3.39 |  | % |  |  |  |
Allowance / net charge-offs |  | 0.99 |  | x |  | 1.04 |  | x |  | 1.24 |  | x |  | 1.16 |  | x |  | 1.04 |  | x |  |  |  |

NM - Not meaningful
(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(b) 1Q17 increase was primarily driven by a few credits within the C&I portfolio, all of which were favorably resolved in second quarter 2017.
(c) 3Q17 increase in delinquencies driven by 2 larger relationships, one of which is a purchased credit-impaired loan.
19

FHN ASSET QUALITY: REGIONAL BANKING
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
|  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q16 |  | 3Q17 |  | 4Q16
Total Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 26,359 |  |  |  | $ | 18,788 |  |  |  | $ | 18,529 |  |  |  | $ | 17,537 |  |  |  | $ | 17,935 |  |  |  | 40% |  | 47%
30+ Delinq. % (a) |  | 0.26 |  | % |  | 0.28 |  | % |  | 0.13 |  | % |  | 0.24 |  | % |  | 0.18 |  | % |  |  |  |
NPL % |  | 0.20 |  |  |  | 0.22 |  |  |  | 0.23 |  |  |  | 0.28 |  |  |  | 0.28 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.22 |  |  |  | 0.12 |  |  |  | 0.07 |  |  |  | 0.03 |  |  |  | 0.05 |  |  |  |  |  |
Allowance / loans % |  | 0.58 |  | % |  | 0.83 |  | % |  | 0.83 |  | % |  | 0.89 |  | % |  | 0.86 |  | % |  |  |  |
Allowance / net charge-offs |  | 3.34 |  | x |  | 6.85 |  | x |  | 12.65 |  | x |  | 31.75 |  | x |  | 19.30 |  | x |  |  |  |
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 15,639 |  |  |  | $ | 12,373 |  |  |  | $ | 12,178 |  |  |  | $ | 11,284 |  |  |  | $ | 11,728 |  |  |  | 26% |  | 33%
30+ Delinq. % (a) (b) (c) |  | 0.20 |  | % |  | 0.28 |  | % |  | 0.03 |  | % |  | 0.18 |  | % |  | 0.08 |  | % |  |  |  |
NPL % |  | 0.18 |  |  |  | 0.13 |  |  |  | 0.17 |  |  |  | 0.24 |  |  |  | 0.24 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.29 |  |  |  | 0.10 |  |  |  | 0.04 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.62 |  | % |  | 0.78 |  | % |  | 0.75 |  | % |  | 0.81 |  | % |  | 0.75 |  | % |  |  |  |
Allowance / net charge-offs |  | 2.49 |  | x |  | 7.83 |  | x |  | 17.85 |  | x |  | NM |  |  |  | NM |  |  |  |  |  |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 4,215 |  |  |  | $ | 2,251 |  |  |  | $ | 2,212 |  |  |  | $ | 2,173 |  |  |  | $ | 2,136 |  |  |  | 87% |  | 97%
30+ Delinq. % (a) |  | 0.11 |  | % |  | 0.02 |  | % |  | 0.01 |  | % |  | 0.03 |  | % |  | 0.01 |  | % |  |  |  |
NPL % |  | 0.03 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.11 |  |  |  | 0.13 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | 0.11 |  |  |  |  |  |
Allowance / loans % |  | 0.67 |  | % |  | 1.32 |  | % |  | 1.38 |  | % |  | 1.42 |  | % |  | 1.59 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | 14.28 |  | x |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 5,774 |  |  |  | $ | 3,714 |  |  |  | $ | 3,695 |  |  |  | $ | 3,655 |  |  |  | $ | 3,643 |  |  |  | 55% |  | 58%
30+ Delinq. % (a) |  | 0.40 |  | % |  | 0.38 |  | % |  | 0.46 |  | % |  | 0.48 |  | % |  | 0.49 |  | % |  |  |  |
NPL % |  | 0.39 |  |  |  | 0.61 |  |  |  | 0.54 |  |  |  | 0.55 |  |  |  | 0.52 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | 0.04 |  |  |  | NM |  |  |  | NM |  |  |  | — |  |  |  |  |  |
Allowance / loans % |  | 0.28 |  | % |  | 0.46 |  | % |  | 0.48 |  | % |  | 0.53 |  | % |  | 0.52 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | 11.04 |  | x |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Credit Card, Permanent Mortgage, and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 731 |  |  |  | $ | 450 |  |  |  | $ | 444 |  |  |  | $ | 425 |  |  |  | $ | 428 |  |  |  | 62% |  | 71%
30+ Delinq. % (a) |  | 1.10 |  | % |  | 0.85 |  | % |  | 0.81 |  | % |  | 0.90 |  | % |  | 1.08 |  | % |  |  |  |
NPL % |  | 0.07 |  |  |  | 0.10 |  |  |  | 0.09 |  |  |  | 0.09 |  |  |  | 0.09 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 1.83 |  |  |  | 2.19 |  |  |  | 2.21 |  |  |  | 2.55 |  |  |  | 2.79 |  |  |  |  |  |
Allowance / loans % |  | 1.70 |  | % |  | 2.79 |  | % |  | 3.13 |  | % |  | 3.36 |  | % |  | 3.09 |  | % |  |  |  |
Allowance / net charge-offs |  | 1.25 |  | x |  | 1.27 |  | x |  | 1.44 |  | x |  | 1.33 |  | x |  | 1.12 |  | x |  |  |  |
ASSET QUALITY: CORPORATE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 53 |  |  |  | $ | 58 |  |  |  | $ | 63 |  |  |  | $ | 67 |  |  |  | $ | 71 |  |  |  | (9)% |  | (25)%
30+ Delinq. % (a) |  | 3.98 |  | % |  | 4.22 |  | % |  | 6.52 |  | % |  | 4.25 |  | % |  | 4.37 |  | % |  |  |  |
NPL % |  | 4.03 |  |  |  | 3.75 |  |  |  | 2.90 |  |  |  | 2.25 |  |  |  | 1.66 |  |  |  |  |  |
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
(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(b) 1Q17 increase was primarily driven by a few credits within the C&I portfolio, all of which were favorably resolved in second quarter 2017.
(c) 3Q17 increase in delinquencies driven by 2 larger relationships, one of which is a purchased credit-impaired loan.
20

FHN ASSET QUALITY: NON-STRATEGIC
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4Q17 Changes vs.
|  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q16 |  | 3Q17 |  | 4Q16
Total Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 1,247 |  |  |  | $ | 1,320 |  |  |  | $ | 1,397 |  |  |  | $ | 1,486 |  |  |  | $ | 1,584 |  |  |  | (6)% |  | (21)%
30+ Delinq. % (a) |  | 1.85 |  | % |  | 1.62 |  | % |  | 1.79 |  | % |  | 1.89 |  | % |  | 1.94 |  | % |  |  |  |
NPL % |  | 6.08 |  |  |  | 6.23 |  |  |  | 6.08 |  |  |  | 6.22 |  |  |  | 5.92 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 2.84 |  | % |  | 2.94 |  | % |  | 3.15 |  | % |  | 3.10 |  | % |  | 3.03 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 418 |  |  |  | $ | 419 |  |  |  | $ | 420 |  |  |  | $ | 420 |  |  |  | $ | 420 |  |  |  | * |  | *
30+ Delinq. % (a) |  | — |  | % |  | — |  | % |  | — |  | % |  | — |  | % |  | — |  | % |  |  |  |
NPL % |  | 0.73 |  |  |  | 0.74 |  |  |  | 0.95 |  |  |  | 0.97 |  |  |  | 0.98 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.33 |  | % |  | 0.32 |  | % |  | 0.34 |  | % |  | 0.35 |  | % |  | 0.33 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 594 |  |  |  | $ | 656 |  |  |  | $ | 722 |  |  |  | $ | 802 |  |  |  | $ | 881 |  |  |  | (9)% |  | (33)%
30+ Delinq. % (a) |  | 3.06 |  | % |  | 2.80 |  | % |  | 2.62 |  | % |  | 2.60 |  | % |  | 2.76 |  | % |  |  |  |
NPL % |  | 8.23 |  |  |  | 8.26 |  |  |  | 7.64 |  |  |  | 7.65 |  |  |  | 7.26 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 3.53 |  | % |  | 3.66 |  | % |  | 3.90 |  | % |  | 3.80 |  | % |  | 3.56 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 229 |  |  |  | $ | 239 |  |  |  | $ | 249 |  |  |  | $ | 258 |  |  |  | $ | 275 |  |  |  | (4)% |  | (17)%
30+ Delinq. % (a) |  | 2.12 |  | % |  | 1.20 |  | % |  | 2.38 |  | % |  | 2.78 |  | % |  | 2.29 |  | % |  |  |  |
NPL % |  | 10.40 |  |  |  | 10.39 |  |  |  | 10.30 |  |  |  | 10.45 |  |  |  | 9.32 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.18 |  |  |  | NM |  |  |  | 0.56 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 5.70 |  | % |  | 5.62 |  | % |  | 5.80 |  | % |  | 5.45 |  | % |  | 5.49 |  | % |  |  |  |
Allowance / net charge-offs |  | 31.54 |  | x |  | NM |  |  |  | 10.13 |  | x |  | NM |  |  |  | NM |  |  |  |  |  |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 6 |  |  |  | $ | 6 |  |  |  | $ | 6 |  |  |  | $ | 6 |  |  |  | $ | 8 |  |  |  | * |  | (25)%
30+ Delinq. % (a) |  | 0.95 |  | % |  | 1.44 |  | % |  | 1.95 |  | % |  | 1.84 |  | % |  | 1.73 |  | % |  |  |  |
NPL % |  | 1.89 |  |  |  | 1.92 |  |  |  | 1.93 |  |  |  | 1.90 |  |  |  | 1.82 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 1.90 |  |  |  | 1.14 |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 1.36 |  | % |  | 0.69 |  | % |  | 0.35 |  | % |  | 0.08 |  | % |  | 2.26 |  | % |  |  |  |
Allowance / net charge-offs |  | 0.71 |  | x |  | 0.60 |  | x |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |

NM - Not meaningful
* Amount is less than one percent.
(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
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FHN NON-GAAP TO GAAP RECONCILIATION
Quarterly/Annually, Unaudited

|  |  |  |  |  |  |  |  |  |  | Twelve Months Ended |
(Dollars and shares in thousands, except per share data) | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q16 |  |  | 2017 |  | 2016 |
Tangible Common Equity (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(A) Total equity (GAAP) | $ | 4,580,488 |  |  | $ | 2,883,551 |  |  | $ | 2,826,888 |  |  | $ | 2,740,460 |  |  | $ | 2,705,084 |  |  | $ | 4,580,488 |  |  | $ | 2,705,084 |  |
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 | $ | 4,189,433 |  |  | $ | 2,492,496 |  |  | $ | 2,435,833 |  |  | $ | 2,349,405 |  |  | $ | 2,314,029 |  |  | $ | 4,189,433 |  |  | $ | 2,314,029 |  |
Less: Intangible assets (GAAP) (b) | 1,571,242 |  |  | 279,492 |  |  | 281,456 |  |  | 211,156 |  |  | 212,388 |  |  | 1,571,242 |  |  | 212,388 |  |
(C) Tangible common equity (Non-GAAP) | $ | 2,618,191 |  |  | $ | 2,213,004 |  |  | $ | 2,154,377 |  |  | $ | 2,138,249 |  |  | $ | 2,101,641 |  |  | $ | 2,618,191 |  |  | $ | 2,101,641 |  |
Tangible Assets (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(D) Total assets (GAAP) | $ | 41,423,388 |  |  | $29,622,636 |  | $29,369,956 |  | $29,618,600 |  | $28,555,231 |  | $41,423,388 |  | $ | 28,555,231 |  |
Less: Intangible assets (GAAP) (b) | 1,571,242 |  |  | 279,492 |  |  | 281,456 |  |  | 211,156 |  |  | 212,388 |  |  | 1,571,242 |  |  | 212,388 |  |
(E) Tangible assets (Non-GAAP) | $ | 39,852,146 |  |  | $29,343,144 |  | $29,088,500 |  | $29,407,444 |  | $28,342,843 |  | $39,852,146 |  | $28,342,843 |
Average Tangible Common Equity (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(F) Average total equity (GAAP) | $ | 3,506,165 |  |  | $ | 2,866,757 |  |  | $ | 2,778,169 |  |  | $ | 2,722,668 |  |  | $ | 2,746,828 |  |  | $ | 2,970,308 |  |  | $ | 2,691,478 |  |
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 | $ | 3,115,110 |  |  | $ | 2,475,702 |  |  | $ | 2,387,114 |  |  | $ | 2,331,613 |  |  | $ | 2,355,773 |  |  | $ | 2,579,253 |  |  | $ | 2,300,423 |  |
Less: Average intangible assets (GAAP) (b) | 726,958 |  |  | 280,575 |  |  | 281,326 |  |  | 211,757 |  |  | 213,019 |  |  | 376,306 |  |  | 214,915 |  |
(H) Average tangible common equity (Non-GAAP) | $ | 2,388,152 |  |  | $ | 2,195,127 |  |  | $ | 2,105,788 |  |  | $ | 2,119,856 |  |  | $ | 2,142,754 |  |  | $ | 2,202,947 |  |  | $ | 2,085,508 |  |
Net Income/(loss) Available to Common Shareholders |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(I) Net income/(loss) available to common shareholders (quarters are annualized) (GAAP) | $ | (209,641 | ) |  | $ | 267,148 |  |  | $ | 364,206 |  |  | $ | 219,073 |  |  | $ | 212,017 |  |  | $ | 159,315 |  |  | $220,846 |
Period-end Shares Outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(J) Period-end shares outstanding | 326,736 |  |  | 234,231 |  |  | 234,135 |  |  | 233,883 |  |  | 233,624 |  |  | 326,736 |  |  | 233,624 |
Ratios |  |  |  |  |  |  |  |  |  |  |  |  |  |
(I)/(G) Return on average common equity (“ROE”) (GAAP) | (6.73 | ) | % | 10.79 |  | % | 15.26 |  | % | 9.40 |  | % | 9.00 |  | % | 6.18 |  | % | 9.60 |  | %
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP) | (8.78 | ) | % | 12.17 |  | % | 17.30 |  | % | 10.33 |  | % | 9.89 |  | % | 7.23 |  | % | 10.59 |  | %
(A)/(D) Total equity to total assets (GAAP) | 11.06 |  | % | 9.73 |  | % | 9.63 |  | % | 9.25 |  | % | 9.47 |  | % | 11.06 |  | % | 9.47 |  | %
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP) | 6.57 |  | % | 7.54 |  | % | 7.41 |  | % | 7.27 |  | % | 7.42 |  | % | 6.57 |  | % | 7.42 |  | %
(B)/(J) Book value per common share (GAAP) | $ | 12.82 |  |  | $ | 10.64 |  |  | $ | 10.40 |  |  | $ | 10.05 |  |  | $ | 9.90 |  |  | $ | 12.82 |  |  | $ | 9.90 |  |
(C)/(J) Tangible book value per common share (Non-GAAP) | $ | 8.01 |  |  | $ | 9.45 |  |  | $ | 9.20 |  |  | $ | 9.14 |  |  | $ | 9.00 |  |  | $ | 8.01 |  |  | $ | 9.00 |  |

(a) Included in Total equity on the Consolidated Balance Sheet.
(b) Includes goodwill and other intangible assets, net of amortization.
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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.
Troubled Debt Restructuring (“TDR”): A restructuring of debt whereby a creditor for economic or legal reasons related to the borrower’s financial difficulties grants a concession to the borrower that it would not otherwise consider. Such concession is granted in an attempt to protect as much of the creditor’s investment as possible by increasing the probability of repayment.

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.

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