EX-99.1 2 a1q18financialsupplementdo.htm EXHIBIT 99.1 FINANCIAL SUPPLEMENT
1

FIRST QUARTER 2018
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 | 6
Other Income and Other Expense | 7
Balance Sheet |
Period End Balance Sheet | 8
Average Balance Sheet | 9
Net Interest Income | 10
Average Balance Sheet: Yields and Rates | 11
Capital Highlights | 12
Business Segment Detail |
Segment Highlights | 13
Regional Banking | 14
Fixed Income and Corporate | 15
Non-Strategic | 16
Asset Quality |
Asset Quality: Consolidated | 17
Asset Quality: Regional Banking and Corporate | 19
Asset Quality: Non-Strategic | 20
Non-GAAP to GAAP Reconciliation | 21
Glossary of Terms | 22

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 21 of this financial supplement.
2

FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE |

3

FHN PERFORMANCE HIGHLIGHTS
Summary of First Quarter 2018 Notable Items
Segment |  | Item |  | Income Statement |  | Amount Favorable/ (Unfavorable) |  | Comments
Corporate |  | Acquisition expenses |  | Noninterest expense: various |  | $(31.4) million |  | Pre-tax acquisition-related expenses primarily associated with the Capital Bank Financial Corp. ("CBF") acquisition
Corporate |  | Property sale |  | Noninterest income: other |  | $3.3 million |  | Pre-tax gain on the sale of a building
First Quarter 2018 vs. Fourth Quarter 2017

Consolidated

• | Net income available to common shareholders was $90.6 million, or $.27 per diluted share in 1Q18 compared to net loss available to common shareholders of $52.8 million, or $.20 loss per diluted share in 4Q17

• | Net interest income (“NII”) increased to $301.2 million in 1 Q18 from $242.1 million in 4Q17

• | The increase in NII in 1Q18 was primarily driven by the full quarter impact of loan and deposit growth including accretion associated with the CBF acquisition (compared with one month in 4Q17)

• | NII was also favorably impacted in 1Q18 by higher average balances of other commercial loans, accelerated accretion due to loan pay-offs, and the positive impact of higher interest rates, but was negatively impacted by fewer days in 1Q18 relative to 4Q17 and lower average balances of loans to mortgage companies

• | Net Interest M argin (“NIM”) improved to 3.43 percent in 1Q18 from 3.27 percent in 4Q17

• | The improvement in NIM was also largely the result of deposit and loan growth and accretion associated with the CBF acquisition

• | The provision for loan losses was a credit of $1.0 million in 1Q18 compared to provision expense of $3.0 million in 4Q17

• | Noninterest income (including securities gains) increased to $136.0 million in 1Q18 from $133.2 million in 4Q17

• | Noninterest expense decreased to $313.3 millio n in 1Q18 from $346.7 million in 4Q17

• | The expense decrease was largely driven by the following items:

• | $30.0 million decrease in loss accruals related to legal matters

• | $15.3 million decrease in acquisition-related expenses associated with the CBF acquisition

• | Lower variable compensation and other personnel-related expenses in 1Q18 compared to 4Q17

• | These expense decreases were somewhat offset by a full quarter of expenses related to the inclusion of Capital Bank in 1Q18 compared with one month of expenses in 4Q17

• | Provision for income taxes de creased to $29.9 million in 1Q 18 from $74.0 million in 4Q17

• | 1Q18 includes $1.6 million of unfavorable discrete items related to CBF purchase accounting adjustments

• | 4Q17 includes the effects of the Tax Cuts and Jobs Act ("The Tax Reform Act") somewhat mitigated by a favorable effective tax rate adjustment associated with the reversal of a capital loss deferred tax valuation allowance

Regional Banking

• | Pre-tax income increased t o $167.0 mill ion in 1Q18 from $126.2 million in 4Q17; PPNR w as $172.4 million and $135.9 million in 1Q18 and 4Q17, respectively

• | Average loans increased to $25.7 billion in 1Q18 from $21.1 billion in 4Q17; period-end loans decreased 1 percent to $26.0 billion in 1Q18

• | Average deposits increased to $27.1 billion in 1Q18 from $22.4 billion in 4Q17, respectively; period-end deposits remained consistent at $27.7 billion

• | The increase in average loans and deposits was primarily driven by loans and deposits added through the CBF acquisition late in 4Q17

• | NII increase d 22 percent to $298.7 mill ion in 1Q18 from $244.0 million in 4Q17 primarily due to the full quarter impact of loan and deposit growth and accretion associated with the CBF acquisition (compared with one month in 4Q17)

• | Provision expense decreased to $5.3 million in 1Q18 from $9.7 million in 4Q17

• | Noninterest income increased 12 percent to $78.9 million in 1Q18 from $70.5 million in 4Q17 largely driven by increases in bankcard fee income, other service charges, and deposit fee income, as well as other increases due to the full quarter impact of CBF activities in 1Q18 compared with one month of CBF activities in 4Q17

• | Noninterest expense was $205.2 million in 1Q18, up 15 percent from $178.6 million in 4Q17

• | 1Q18 expense includes a $29.5 million increase in expenses attributable to CBF activities, inclusive of a $12.4 million increase in personnel-related expenses (primarily due to the full quarter impact of CBF activities in 1Q18 compared with one month in 4Q17)

Fixed Income

• | Pre-tax incom e was $3.5 millio n in 1Q18 compared to $6.0 million in 4Q17

• | NII increased to $8.5 million in 1Q18 from $5.9 million in 4Q17

• | Noninterest income decreased to $45.6 milli on in 1Q18 from $55.3 million in 4Q17

• | Fixed income product revenue w as $38.0 million in 1Q18 compared to $40.6 million in 4Q17

• | Fixed income product average daily revenue (“ADR”) wa s $624 th ousand and $655 thousand in 1Q18 and 4Q17, respectively

• | Other product revenue w as $7.6 million in 1Q18 compared to $14.6 million in 4Q17 due to a dec rease in fees from loan sales

• | Noninterest expense wa s $50.5 mil lion in 1Q18 compared to $55.2 million in 4Q17 driven by a decrease in variable compensation expense somewhat offset by the seasonal first quarter FICA reset

4

FHN PERFORMANCE HIGHLIGHTS (continued)
First Quarter 2018 vs. Fourth Quarter 2017 (continued)

Corporate

• | Pre-tax loss was $54.8 millio n in 1Q18 compared to pre-tax loss of $82.9 million in 4Q17

• | NII was negativ e $13.2 million and n egative $15.6 million in 1Q18 and 4Q17, respectively

• | Estimated effective duration of the securities portfolio was 4.5 years in 1Q18 and 3.7 years in 4Q17

• | Noninterest income (including net securities gains) w as $9.5 milli on in 1Q18, up from $6.7 million in 4Q17

• | 1Q18 includes a $3.3 million gain on the sale of a building

• | Noninterest expense decreased to $51.1 m illion in 1Q18 from $74.0 million in 4Q17

• | 1Q18 includes a $15.3 million decrease in acquisition-related expenses primarily associated with the CBF acquisition, as well as lower personnel-related expenses relative to 4Q17

• | 4Q17 expense also includes a $5.6 million charitable contribution to the First Tennessee Foundation, somewhat offset by $4.3 million of deferred compensation BOLI gains

Non-Strategic

• | Pre-tax income was $9.2 million in 1Q18 compared to pre-tax loss of $23.7 million in 4Q17

• | NII was $7.2 million and $7.8 million in 1Q18 and 4Q17, respectively

• | The provision credit was $6.3 million in 1Q18 compared to a provision credit of $6.7 million in 4Q17

• | Noninterest expense decreased to $6.4 million in 1Q18 from $38.9 million in 4Q17

• | 4Q17 expense includes $32.0 million of pre-tax loss accruals related to legal matters

Asset Quality

• | Allowance for loan losses decreased to $187.2 million in 1Q18 from $189.6 million in 4Q17; the allowance to loans ratio remained at 6 9 bps

• | Net charge-offs we re $1.4 million in 1Q18 compared to $8.3 million in 4Q17

• | Regional banking net charge-offs were $3.6 million compared to $11.6 million in 4Q17

• | 4Q17 was primarily due to a single larger credit within the C&I portfolio as a result of borrower fraud

• | Non-strategic net recoveries were $2.2 million compared to $3.3 million in 4Q17

• | Nonperforming loans (“NPLs”), excludin g loans held-for-sale, increased to $132.0 million in 1Q18 from $130.6 million in 4Q17

• | 30+ delinquencies decreased $13.1 million to $79.4 million in 1 Q18 from $92.5 million in 4Q17

• | The decrease was primarily driven by favorable resolutions across the commercial and consumer portfolios

Taxes

• | The effective tax rates for 1Q18 and 4Q17 were 23.96 percent and 288.93 percent, respectively

• | 1Q18 was favorably affected by the decrease in the federal tax rate from 35 percent to 21 percent, non-deductible expenses related to FDIC premium and executive compensation offset a portion of the benefit from the rate decrease

• | 1Q18 includes $1.6 million of unfavorable discrete items related to CBF purchase accounting adjustments

• | 4Q17 effective rate was negatively impacted by the estimated effects of the Tax Reform Act primarily associated with a decrease in the valuation of the net deferred tax asset balance

• | 4Q17 effective rate was favorably impacted by the reversal of a capital loss deferred tax valuation allowance

• | The rates also reflect the favorable net effect from permanent benefits. Permanent benefits primarily consist of tax credit investments, life insurance, and tax-exempt interest. The permanent benefits in 2018 are offset by non-deductibility (under Tax Reform) of a portion of FDIC premiums and executive compensation expenses

Capital and Liquidity

• | Declared $.12 per common share quarterly dividend in 1Q18, aggregating $39.2 million, which was paid on April 2, 2018

• | Declared aggregate preferred quarterly dividend of $1.6 million in 1Q18 which was paid on April 10, 2018

• | There were no repurchases of shares in 1Q18 (other than those related to employee stock award programs). In January 2018, FHN announced board approval of a new $250 million common share purchase program that will expire January 31, 2020, replacing an old program 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)

• | Total equity to total assets (GAAP) of 11.30 percent in 1Q18 compared to 11.06 percent in 4Q17

• | Tangible common equity to tangible assets (Non-GAAP) of 6.71 percent in 1Q18 compared to 6.57 percent in 4Q17

• | Common Equity Tier 1 of 8.98 percent in 1Q18 compared to 8.88 percent in 4Q17

• | Tier 1 of 9.98 percent in 1Q18 compared to 9.83 percent in 4Q17

• | Total Capital of 11.25 percent in 1Q18 compared to 11.10 percent in 4Q17

• | Leverage of 8.50 percent in 1Q18 compared to 10.31 percent in 4Q17; 1Q18 decrease is driven by an increase in average assets for leverage (ratio denominator) due to the timing of the CBF acquisition late in 4Q17 (full quarter average impact in 1Q18 compared to one month in 4Q17)

5

FHN CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited

| (a) |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Dollars in thousands, except per share data) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Interest income | $ | 363,355 |  |  | $ | 287,633 |  |  | $ | 248,145 |  |  | $ | 235,341 |  |  | $ | 218,811 |  |  | 26 |  | % | 66 |  | %
Less: interest expense | 62,182 |  |  | 45,545 |  |  | 38,328 |  |  | 34,640 |  |  | 29,103 |  |  | 37 |  | % | NM |  |
Net interest income | 301,173 |  |  | 242,088 |  |  | 209,817 |  |  | 200,701 |  |  | 189,708 |  |  | 24 |  | % | 59 |  | %
Provision/(provision credit) for loan losses | (1,000 | ) |  | 3,000 |  |  | — |  |  | (2,000 | ) |  | (1,000 | ) |  | NM |  |  | * |  |
Net interest income after provision for loan losses | 302,173 |  |  | 239,088 |  |  | 209,817 |  |  | 202,701 |  |  | 190,708 |  |  | 26 |  | % | 58 |  | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income | 45,506 |  |  | 55,079 |  |  | 55,758 |  |  | 55,110 |  |  | 50,678 |  |  | (17 | ) | % | (10 | ) | %
Deposit transactions and cash management | 31,162 |  |  | 30,158 |  |  | 28,011 |  |  | 27,858 |  |  | 24,565 |  |  | 3 |  | % | 27 |  | %
Brokerage, management fees and commissions | 13,483 |  |  | 12,642 |  |  | 11,937 |  |  | 12,029 |  |  | 11,906 |  |  | 7 |  | % | 13 |  | %
Trust services and investment management | 7,277 |  |  | 7,116 |  |  | 6,953 |  |  | 7,698 |  |  | 6,653 |  |  | 2 |  | % | 9 |  | %
Bankcard income | 11,267 |  |  | 8,237 |  |  | 6,170 |  |  | 5,605 |  |  | 5,455 |  |  | 37 |  | % | NM |  |
Bank-owned life insurance | 3,993 |  |  | 3,987 |  |  | 3,539 |  |  | 4,351 |  |  | 3,247 |  |  | * |  |  | 23 |  | %
Securities gains/(losses), net | 86 |  |  | 137 |  |  | 6 |  |  | 405 |  |  | 44 |  |  | (37 | ) | % | 95 |  | %
Other (b) | 23,243 |  |  | 15,834 |  |  | 43 |  |  | 14,617 |  |  | 14,391 |  |  | 47 |  | % | 62 |  | %
Total noninterest income | 136,017 |  |  | 133,190 |  |  | 112,417 |  |  | 127,673 |  |  | 116,939 |  |  | 2 |  | % | 16 |  | %
Adjusted gross income after provision for loan losses | 438,190 |  |  | 372,278 |  |  | 322,234 |  |  | 330,374 |  |  | 307,647 |  |  | 18 |  | % | 42 |  | %
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation, incentives, and benefits (c) | 171,254 |  |  | 177,312 |  |  | 137,383 |  |  | 138,276 |  |  | 134,494 |  |  | (3 | ) | % | 27 |  | %
Repurchase and foreclosure provision (d) | (72 | ) |  | 53 |  |  | (609 | ) |  | (21,733 | ) |  | (238 | ) |  | NM |  |  | 70 |  | %
Legal fees | 2,345 |  |  | 1,245 |  |  | 2,052 |  |  | 3,496 |  |  | 5,283 |  |  | 88 |  | % | (56 | ) | %
Professional fees (e) | 12,272 |  |  | 26,958 |  |  | 6,566 |  |  | 9,659 |  |  | 4,746 |  |  | (54 | ) | % | NM |  |
Occupancy | 20,451 |  |  | 15,887 |  |  | 13,619 |  |  | 12,800 |  |  | 12,340 |  |  | 29 |  | % | 66 |  | %
Computer software | 15,132 |  |  | 13,157 |  |  | 11,993 |  |  | 12,285 |  |  | 10,799 |  |  | 15 |  | % | 40 |  | %
Contract employment and outsourcing (f) | 4,053 |  |  | 5,979 |  |  | 2,762 |  |  | 3,255 |  |  | 2,958 |  |  | (32 | ) | % | 37 |  | %
Operations services | 15,561 |  |  | 10,619 |  |  | 10,805 |  |  | 11,524 |  |  | 10,875 |  |  | 47 |  | % | 43 |  | %
Equipment rentals, depreciation, and maintenance | 10,018 |  |  | 9,530 |  |  | 6,626 |  |  | 7,036 |  |  | 6,351 |  |  | 5 |  | % | 58 |  | %
FDIC premium expense | 8,614 |  |  | 9,090 |  |  | 6,062 |  |  | 5,927 |  |  | 5,739 |  |  | (5 | ) | % | 50 |  | %
Advertising and public relations | 3,599 |  |  | 5,313 |  |  | 5,205 |  |  | 4,095 |  |  | 4,601 |  |  | (32 | ) | % | (22 | ) | %
Communications and courier | 8,232 |  |  | 5,379 |  |  | 4,328 |  |  | 4,117 |  |  | 3,800 |  |  | 53 |  | % | NM |  |
Amortization of intangible assets | 6,474 |  |  | 3,568 |  |  | 1,964 |  |  | 1,964 |  |  | 1,232 |  |  | 81 |  | % | NM |  |
Other (b) | 35,332 |  |  | 62,580 |  |  | 28,113 |  |  | 25,216 |  |  | 19,225 |  |  | (44 | ) | % | 84 |  | %
Total noninterest expense | 313,265 |  |  | 346,670 |  |  | 236,869 |  |  | 217,917 |  |  | 222,205 |  |  | (10 | ) | % | 41 |  | %
Income before income taxes | 124,925 |  |  | 25,608 |  |  | 85,365 |  |  | 112,457 |  |  | 85,442 |  |  | NM |  |  | 46 |  | %
Provision for income taxes (g) | 29,931 |  |  | 73,989 |  |  | 13,596 |  |  | 17,253 |  |  | 27,054 |  |  | (60 | ) | % | 11 |  | %
Net income/(loss) | 94,994 |  |  | (48,381 | ) |  | 71,769 |  |  | 95,204 |  |  | 58,388 |  |  | NM |  |  | 63 |  | %
Net income attributable to noncontrolling interest | 2,820 |  |  | 2,910 |  |  | 2,883 |  |  | 2,852 |  |  | 2,820 |  |  | (3 | ) | % | * |  |
Net income/(loss) attributable to controlling interest | 92,174 |  |  | (51,291 | ) |  | 68,886 |  |  | 92,352 |  |  | 55,568 |  |  | NM |  |  | 66 |  | %
Preferred stock dividends | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | * |  |  | * |  |
Net income/(loss) available to common shareholders | $ | 90,624 |  |  | $ | (52,841 | ) |  | $ | 67,336 |  |  | $ | 90,802 |  |  | $ | 54,018 |  |  | NM |  |  | 68 |  | %
Common Stock Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS | $ | 0.28 |  |  | $ | (0.20 | ) |  | $ | 0.29 |  |  | $ | 0.39 |  |  | $ | 0.23 |  |  | NM |  |  | 22 |  | %
Basic shares (thousands) | 326,489 |  |  | 265,169 |  |  | 233,749 |  |  | 233,482 |  |  | 233,076 |  |  | 23 |  | % | 40 |  | %
Diluted EPS | $ | 0.27 |  |  | $ | (0.20 | ) |  | $ | 0.28 |  |  | $ | 0.38 |  |  | $ | 0.23 |  |  | NM |  |  | 17 |  | %
Diluted shares (thousands) | 330,344 |  |  | 265,169 |  |  | 236,340 |  |  | 236,263 |  |  | 236,855 |  |  | 25 |  | % | 39 |  | %
Key Ratios & Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (annualized) (h) | 0.95 | % |  | (0.58 | )% |  | 0.99 | % |  | 1.32 | % |  | 0.82 | % |  |  |  |  |  |  |
Return on average common equity (“ROE”) (annualized) (g) | 8.79 | % |  | (6.73 | )% |  | 10.79 | % |  | 15.26 | % |  | 9.40 | % |  |  |  |  |  |  |
Return on average tangible common equity (“ROTCE”) (annualized) (h) (i) | 14.06 | % |  | (8.78 | )% |  | 12.17 | % |  | 17.30 | % |  | 10.33 | % |  |  |  |  |  |  |
Fee income to total revenue (h) | 31.10 | % |  | 35.47 | % |  | 34.89 | % |  | 38.80 | % |  | 38.13 | % |  |  |  |  |  |  |
Efficiency ratio (h) | 71.67 | % |  | 92.41 | % |  | 73.51 | % |  | 66.44 | % |  | 72.47 | % |  |  |  |  |  |  |
Average full time equivalent employees | 5,835 |  |  | 4,792 |  |  | 4,277 |  |  | 4,328 |  |  | 4,258 |  |  |  |  |  |  |  |

Certain previously reported amounts have been revised to reflect the retroactive effect of the adoption of ASU 2017-07 "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" effective January 1, 2018.
NM - Not meaningful
* Amount is less than one percent.
(a) 1Q18 includes three months of activity related to the CBF acquisition compared with one month of activity in 4Q17.
(b) Refer to the Other Income and Other Expense table on page 7 for additional information.
(c) 1Q18 and 4Q17 include $3.9 million and $16.8 million, respectively of acquisition-related expenses associated with the CBF acquisition.
(d) Expense reversals driven by the settlements/recoveries of certain repurchase claims.
(e) 1Q18 and 4Q17 include $5.4 million and $20.3 million, respectively 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.
(f) 1Q18 and 4Q17 include $1.4 million and $.9 million, respectively of acquisition-related expenses associated with the CBF acquisition.
(g) 1Q18 includes $1.6 million of unfavorable discrete tax adjustments related to CBF purchase accounting adjustments; 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 21 of this financial supplement.
6

FHN OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited

|  | (a) |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Thousands) |  | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Other Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ATM and interchange fees |  | $ | 3,267 |  |  | $ | 3,427 |  |  | $ | 3,137 |  |  | $ | 3,083 |  |  | $ | 2,778 |  |  | (5 | ) | % | 18 |  | %
Dividend income (b) |  | 2,249 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | NM |  |  | NM |  |
Electronic banking fees |  | 1,204 |  |  | 1,171 |  |  | 1,282 |  |  | 1,306 |  |  | 1,323 |  |  | 3 |  | % | (9 | ) | %
Letter of credit fees |  | 1,249 |  |  | 1,292 |  |  | 1,211 |  |  | 1,122 |  |  | 1,036 |  |  | (3 | ) | % | 21 |  | %
Mortgage banking |  | 1,770 |  |  | 766 |  |  | 1,354 |  |  | 1,268 |  |  | 1,261 |  |  | NM |  |  | 40 |  | %
Deferred compensation (c) |  | 451 |  |  | 1,876 |  |  | 1,128 |  |  | 1,491 |  |  | 1,827 |  |  | (76 | ) | % | (75 | ) | %
Insurance commissions |  | 757 |  |  | 472 |  |  | 567 |  |  | 592 |  |  | 883 |  |  | 60 |  | % | (14 | ) | %
Other service charges |  | 5,124 |  |  | 3,485 |  |  | 2,954 |  |  | 3,109 |  |  | 2,984 |  |  | 47 |  | % | 72 |  | %
Gain/(loss) on extinguishment of debt (d) |  | — |  |  | — |  |  | (14,329 | ) |  | — |  |  | — |  |  | NM |  |  | NM |  |
Other (e) |  | 7,172 |  |  | 3,345 |  |  | 2,739 |  |  | 2,646 |  |  | 2,299 |  |  | NM |  |  | NM |  |
Total |  | $ | 23,243 |  |  | $ | 15,834 |  |  | $ | 43 |  |  | $ | 14,617 |  |  | $ | 14,391 |  |  | 47 |  | % | 62 |  | %
Other Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Litigation and regulatory matters |  | $ | 2,134 |  |  | $ | 32,114 |  |  | $ | 8,162 |  |  | $ | 533 |  |  | $ | (292 | ) |  | (93 | ) | % | NM |  |
Tax credit investments |  | 1,137 |  |  | 822 |  |  | 762 |  |  | 942 |  |  | 942 |  |  | 38 |  | % | 21 |  | %
Travel and entertainment |  | 2,983 |  |  | 3,154 |  |  | 2,798 |  |  | 3,162 |  |  | 2,348 |  |  | (5 | ) | % | 27 |  | %
Employee training and dues |  | 1,779 |  |  | 1,357 |  |  | 1,198 |  |  | 1,453 |  |  | 1,543 |  |  | 31 |  | % | 15 |  | %
Customer relations |  | 1,063 |  |  | 1,510 |  |  | 1,361 |  |  | 1,543 |  |  | 1,336 |  |  | (30 | ) | % | (20 | ) | %
Miscellaneous loan costs |  | 1,142 |  |  | 673 |  |  | 757 |  |  | 699 |  |  | 622 |  |  | 70 |  | % | 84 |  | %
Supplies |  | 1,836 |  |  | 1,222 |  |  | 928 |  |  | 1,093 |  |  | 863 |  |  | 50 |  | % | NM |  |
OREO |  | 108 |  |  | 53 |  |  | 303 |  |  | 446 |  |  | 204 |  |  | NM |  |  | (47 | ) | %
Other insurance and taxes |  | 2,665 |  |  | 2,457 |  |  | 2,396 |  |  | 2,443 |  |  | 2,390 |  |  | 8 |  | % | 12 |  | %
Non-service components of net periodic pension and post retirement cost |  | 504 |  |  | 363 |  |  | 454 |  |  | 851 |  |  | 477 |  |  | 39 |  | % | 6 |  | %
Other (f) |  | 19,981 |  |  | 18,855 |  |  | 8,994 |  |  | 12,051 |  |  | 8,792 |  |  | 6 |  | % | NM |  |
Total |  | $ | 35,332 |  |  | $ | 62,580 |  |  | $ | 28,113 |  |  | $ | 25,216 |  |  | $ | 19,225 |  |  | (44 | ) | % | 84 |  | %

Certain previously reported amounts have been revised to reflect the retroactive effect of the adoption of ASU 2017-07 "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" effective January 1, 2018.
NM - Not meaningful
(a) 1Q18 includes three months of activity related to the CBF acquisition compared to one month of activity in 4Q17.
(b) Effective 1/1/18 FHN adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" and began recording dividend income from FRB and FHLB holdings in other income. Prior to 1Q18 these amounts were included in Interest income on the Income Statement.
(c) Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense.
(d) 3Q17 includes a $14.3 million loss from the repurchase of equity securities previously included in a financing transaction.
(e) 1Q18 includes a $3.3 million gain on the sale of a building.
(f) 1Q18 includes $17.0 million of acquisition-related expenses associated with the CBF acquisition; 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.
7

FHN CONSOLIDATED PERIOD-END BALANCE SHEET
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Thousands) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities (a) | $ | 4,836,155 |  |  | $ | 5,180,255 |  |  | $ | 3,973,138 |  |  | $ | 3,959,592 |  |  | $ | 3,953,632 |  |  | (7 | ) | % | 22 |  | %
Loans held-for-sale (b) | 770,412 |  |  | 699,377 |  |  | 339,780 |  |  | 432,771 |  |  | 105,456 |  |  | 10 |  | % | NM |  |
Loans, net of unearned income | 27,249,793 |  |  | 27,658,929 |  |  | 20,166,091 |  |  | 19,989,319 |  |  | 19,090,074 |  |  | (1 | ) | % | 43 |  | %
Federal funds sold | 62,541 |  |  | 87,364 |  |  | 76,316 |  |  | 34,036 |  |  | 31,495 |  |  | (28 | ) | % | 99 |  | %
Securities purchased under agreements to resell | 910,670 |  |  | 725,609 |  |  | 663,637 |  |  | 657,991 |  |  | 835,222 |  |  | 26 |  | % | 9 |  | %
Interest-bearing cash (c) | 309,351 |  |  | 1,185,600 |  |  | 604,326 |  |  | 573,666 |  |  | 2,106,597 |  |  | (74 | ) | % | (85 | ) | %
Trading securities | 1,759,430 |  |  | 1,416,345 |  |  | 1,469,402 |  |  | 1,315,891 |  |  | 1,167,310 |  |  | 24 |  | % | 51 |  | %
Total earning assets | 35,898,352 |  |  | 36,953,479 |  |  | 27,292,690 |  |  | 26,963,266 |  |  | 27,289,786 |  |  | (3 | ) | % | 32 |  | %
Cash and due from banks | 459,820 |  |  | 639,073 |  |  | 347,802 |  |  | 387,053 |  |  | 369,290 |  |  | (28 | ) | % | 25 |  | %
Fixed income receivables (d) | 94,036 |  |  | 68,693 |  |  | 68,750 |  |  | 127,724 |  |  | 168,315 |  |  | 37 |  | % | (44 | ) | %
Goodwill (e) | 1,398,501 |  |  | 1,386,853 |  |  | 236,335 |  |  | 236,335 |  |  | 191,371 |  |  | 1 |  | % | NM |  |
Other intangible assets, net (e) | 174,415 |  |  | 184,389 |  |  | 43,157 |  |  | 45,121 |  |  | 19,785 |  |  | (5 | ) | % | NM |  |
Premises and equipment, net | 531,981 |  |  | 532,251 |  |  | 293,393 |  |  | 292,463 |  |  | 290,497 |  |  | * |  |  | 83 |  | %
Other real estate owned ("OREO") | 35,715 |  |  | 43,382 |  |  | 12,522 |  |  | 11,901 |  |  | 15,144 |  |  | (18 | ) | % | NM |  |
Allowance for loan losses | (187,194 | ) |  | (189,555 | ) |  | (194,867 | ) |  | (197,257 | ) |  | (201,968 | ) |  | (1 | ) | % | (7 | ) | %
Derivative assets | 114,348 |  |  | 81,634 |  |  | 80,976 |  |  | 91,653 |  |  | 98,120 |  |  | 40 |  | % | 17 |  | %
Other assets (a) | 1,943,221 |  |  | 1,723,189 |  |  | 1,441,878 |  |  | 1,411,697 |  |  | 1,378,260 |  |  | 13 |  | % | 41 |  | %
Total assets | $ | 40,463,195 |  |  | $ | 41,423,388 |  |  | $ | 29,622,636 |  |  | $ | 29,369,956 |  |  | $ | 29,618,600 |  |  | (2 | ) | % | 37 |  | %
Liabilities and Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 12,674,251 |  |  | $ | 12,877,955 |  |  | $ | 9,164,017 |  |  | $ | 9,429,788 |  |  | $ | 9,367,537 |  |  | (2 | ) | % | 35 |  | %
Commercial interest | 5,816,992 |  |  | 5,469,868 |  |  | 2,915,446 |  |  | 3,285,931 |  |  | 3,275,599 |  |  | 6 |  | % | 78 |  | %
Market-indexed (f) | 4,346,862 |  |  | 4,249,536 |  |  | 3,534,546 |  |  | 3,315,045 |  |  | 4,481,085 |  |  | 2 |  | % | (3 | ) | %
Total interest-bearing deposits | 22,838,105 |  |  | 22,597,359 |  |  | 15,614,009 |  |  | 16,030,764 |  |  | 17,124,221 |  |  | 1 |  | % | 33 |  | %
Noninterest-bearing deposits | 7,980,846 |  |  | 8,023,003 |  |  | 6,485,245 |  |  | 6,302,585 |  |  | 6,355,620 |  |  | (1 | ) | % | 26 |  | %
Total deposits | 30,818,951 |  |  | 30,620,362 |  |  | 22,099,254 |  |  | 22,333,349 |  |  | 23,479,841 |  |  | 1 |  | % | 31 |  | %
Federal funds purchased | 392,714 |  |  | 399,820 |  |  | 292,650 |  |  | 314,892 |  |  | 504,805 |  |  | (2 | ) | % | (22 | ) | %
Securities sold under agreements to repurchase | 672,154 |  |  | 656,602 |  |  | 516,867 |  |  | 743,684 |  |  | 406,354 |  |  | 2 |  | % | 65 |  | %
Trading liabilities | 827,362 |  |  | 638,515 |  |  | 579,028 |  |  | 555,793 |  |  | 848,190 |  |  | 30 |  | % | (2 | ) | %
Other short-term borrowings (g) | 1,332,141 |  |  | 2,626,213 |  |  | 1,637,419 |  |  | 1,044,658 |  |  | 79,454 |  |  | (49 | ) | % | NM |  |
Term borrowings (h) | 1,214,967 |  |  | 1,218,097 |  |  | 1,059,507 |  |  | 1,033,329 |  |  | 1,035,036 |  |  | * |  |  | 17 |  | %
Fixed income payables (d) | 6,167 |  |  | 48,996 |  |  | 44,304 |  |  | 28,571 |  |  | 21,116 |  |  | (87 | ) | % | (71 | ) | %
Derivative liabilities | 121,394 |  |  | 85,061 |  |  | 83,146 |  |  | 92,717 |  |  | 101,347 |  |  | 43 |  | % | 20 |  | %
Other liabilities | 504,817 |  |  | 549,234 |  |  | 426,910 |  |  | 396,075 |  |  | 401,997 |  |  | (8 | ) | % | 26 |  | %
Total liabilities | 35,890,667 |  |  | 36,842,900 |  |  | 26,739,085 |  |  | 26,543,068 |  |  | 26,878,140 |  |  | (3 | ) | % | 34 |  | %
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 204,496 |  |  | 204,211 |  |  | 146,395 |  |  | 146,336 |  |  | 146,177 |  |  | * |  |  | 40 |  | %
Capital surplus | 3,155,407 |  |  | 3,147,613 |  |  | 1,401,359 |  |  | 1,395,797 |  |  | 1,391,777 |  |  | * |  |  | NM |  |
Undivided profits | 1,211,655 |  |  | 1,160,434 |  |  | 1,177,126 |  |  | 1,131,162 |  |  | 1,061,409 |  |  | 4 |  | % | 14 |  | %
Accumulated other comprehensive loss, net (i) | (390,085 | ) |  | (322,825 | ) |  | (232,384 | ) |  | (237,462 | ) |  | (249,958 | ) |  | 21 |  | % | 56 |  | %
Preferred stock | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | * |  |  | * |  |
Noncontrolling interest (j) | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | * |  |  | * |  |
Total equity | 4,572,528 |  |  | 4,580,488 |  |  | 2,883,551 |  |  | 2,826,888 |  |  | 2,740,460 |  |  | * |  |  | 67 |  | %
Total liabilities and equity | $ | 40,463,195 |  |  | $ | 41,423,388 |  |  | $ | 29,622,636 |  |  | $ | 29,369,956 |  |  | $ | 29,618,600 |  |  | (2 | ) | % | 37 |  | %

Certain previously reported amounts have been reclassified to reflect the early adoption of ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" effective December 31, 2017.
NM - Not meaningful
*Amount is less than one percent.
(a) Effective 1/1/18 FHN adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of all equity investments from investment securities to other assets.
(b) 4Q17 increase driven by loans acquired from CBF that have been classified as held-for-sale; 2Q17 increase driven by the Coastal acquisition.
(c) Includes excess balances held at Fed; 4Q17 increase driven by the CBF acquisition; 2Q17 decrease due to loan growth and the Coastal acquisition; 1Q17 level largely driven by an inflow of customer deposits.
(d) Period-end balances fluctuate based on the level of pending unsettled trades.
(e) 4Q17 increase driven by the CBF acquisition; 2Q17 increase driven by the Coastal acquisition.
(f) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.
(g) Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.
(h) 4Q17 increase driven by the CBF acquisition.
(i) 1Q18 increase primarily driven by an increase in unrealized losses on AFS securities.
(j) Consists of preferred stock of subsidiaries.
8

FHN CONSOLIDATED AVERAGE BALANCE SHEET
Quarterly, Unaudited

| (a) |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Thousands) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and industrial (C&I) | $ | 15,535,621 |  |  | $ | 13,756,024 |  |  | $ | 12,474,188 |  |  | $ | 11,830,942 |  |  | $ | 11,381,258 |  |  | 13 |  | % | 37 |  | %
Commercial real estate | 4,230,217 |  |  | 2,892,949 |  |  | 2,211,831 |  |  | 2,175,733 |  |  | 2,176,355 |  |  | 46 |  | % | 94 |  | %
Consumer real estate | 6,302,365 |  |  | 5,029,588 |  |  | 4,398,550 |  |  | 4,431,591 |  |  | 4,491,786 |  |  | 25 |  | % | 40 |  | %
Permanent mortgage | 389,732 |  |  | 400,991 |  |  | 405,287 |  |  | 408,202 |  |  | 415,916 |  |  | (3 | ) | % | (6 | ) | %
Credit card and other | 594,130 |  |  | 439,057 |  |  | 354,807 |  |  | 355,123 |  |  | 348,123 |  |  | 35 |  | % | 71 |  | %
Total loans, net of unearned income (b) | 27,052,065 |  |  | 22,518,609 |  |  | 19,844,663 |  |  | 19,201,591 |  |  | 18,813,438 |  |  | 20 |  | % | 44 |  | %
Loans held-for-sale (c) | 726,978 |  |  | 504,577 |  |  | 540,121 |  |  | 320,698 |  |  | 110,726 |  |  | 44 |  | % | NM |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | 98 |  |  | 99 |  |  | 109 |  |  | 100 |  |  | 100 |  |  | (1 | ) | % | (2 | ) | %
U.S. government agencies | 4,792,709 |  |  | 4,042,844 |  |  | 3,762,180 |  |  | 3,755,818 |  |  | 3,735,472 |  |  | 19 |  | % | 28 |  | %
States and municipalities | 51 |  |  | 182 |  |  | — |  |  | — |  |  | 4,350 |  |  | (72 | ) | % | (99 | ) | %
Corporate bonds | 65,634 |  |  | 29,904 |  |  | 10,000 |  |  | 10,000 |  |  | 10,000 |  |  | NM |  |  | NM |  |
Other (d) | 5,153 |  |  | 203,395 |  |  | 188,361 |  |  | 188,229 |  |  | 186,670 |  |  | (97 | ) | % | (97 | ) | %
Total investment securities | 4,863,645 |  |  | 4,276,424 |  |  | 3,960,650 |  |  | 3,954,147 |  |  | 3,936,592 |  |  | 14 |  | % | 24 |  | %
Trading securities | 1,711,776 |  |  | 1,439,152 |  |  | 1,125,033 |  |  | 1,283,212 |  |  | 929,545 |  |  | 19 |  | % | 84 |  | %
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 27,797 |  |  | 24,980 |  |  | 29,852 |  |  | 36,936 |  |  | 17,015 |  |  | 11 |  | % | 63 |  | %
Securities purchased under agreements to resell | 881,429 |  |  | 818,887 |  |  | 664,208 |  |  | 833,253 |  |  | 691,469 |  |  | 8 |  | % | 27 |  | %
Interest-bearing cash (e) | 482,060 |  |  | 459,868 |  |  | 392,274 |  |  | 970,853 |  |  | 2,117,498 |  |  | 5 |  | % | (77 | ) | %
Total other earning assets | 1,391,286 |  |  | 1,303,735 |  |  | 1,086,334 |  |  | 1,841,042 |  |  | 2,825,982 |  |  | 7 |  | % | (51 | ) | %
Total earning assets | 35,745,750 |  |  | 30,042,497 |  |  | 26,556,801 |  |  | 26,600,690 |  |  | 26,616,283 |  |  | 19 |  | % | 34 |  | %
Allowance for loan losses | (190,420 | ) |  | (194,859 | ) |  | (196,631 | ) |  | (200,534 | ) |  | (202,618 | ) |  | (2 | ) | % | (6 | ) | %
Cash and due from banks | 563,555 |  |  | 437,604 |  |  | 355,626 |  |  | 350,832 |  |  | 367,136 |  |  | 29 |  | % | 54 |  | %
Fixed income receivables | 61,757 |  |  | 79,162 |  |  | 54,286 |  |  | 64,779 |  |  | 41,688 |  |  | (22 | ) | % | 48 |  | %
Premises and equipment, net | 537,359 |  |  | 367,196 |  |  | 293,286 |  |  | 291,769 |  |  | 289,202 |  |  | 46 |  | % | 86 |  | %
Derivative assets | 79,292 |  |  | 68,692 |  |  | 74,453 |  |  | 74,974 |  |  | 84,419 |  |  | 15 |  | % | (6 | ) | %
Other assets (d) | 3,553,431 |  |  | 2,305,962 |  |  | 1,737,006 |  |  | 1,693,840 |  |  | 1,609,996 |  |  | 54 |  | % | NM |  |
Total assets | $ | 40,350,724 |  |  | $ | 33,106,254 |  |  | $ | 28,874,827 |  |  | $ | 28,876,350 |  |  | $ | 28,806,106 |  |  | 22 |  | % | 40 |  | %
Liabilities and equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 12,586,843 |  |  | $ | 10,279,937 |  |  | $ | 9,244,021 |  |  | $ | 9,330,990 |  |  | $ | 9,003,550 |  |  | 22 |  | % | 40 |  | %
Commercial interest | 5,540,090 |  |  | 3,684,643 |  |  | 2,876,398 |  |  | 3,086,139 |  |  | 3,097,922 |  |  | 50 |  | % | 79 |  | %
Market-indexed (f) | 4,238,128 |  |  | 3,958,224 |  |  | 3,523,450 |  |  | 3,809,281 |  |  | 4,666,292 |  |  | 7 |  | % | (9 | ) | %
Total interest-bearing deposits | 22,365,061 |  |  | 17,922,804 |  |  | 15,643,869 |  |  | 16,226,410 |  |  | 16,767,764 |  |  | 25 |  | % | 33 |  | %
Federal funds purchased | 464,300 |  |  | 425,900 |  |  | 376,150 |  |  | 435,854 |  |  | 552,820 |  |  | 9 |  | % | (16 | ) | %
Securities sold under agreements to repurchase | 756,487 |  |  | 595,275 |  |  | 680,366 |  |  | 616,837 |  |  | 419,131 |  |  | 27 |  | % | 80 |  | %
Trading liabilities | 822,815 |  |  | 741,063 |  |  | 597,269 |  |  | 762,667 |  |  | 642,456 |  |  | 11 |  | % | 28 |  | %
Other short-term borrowings (g) | 1,698,490 |  |  | 1,246,087 |  |  | 655,599 |  |  | 221,472 |  |  | 80,939 |  |  | 36 |  | % | NM |  |
Term borrowings | 1,219,916 |  |  | 1,121,268 |  |  | 1,112,735 |  |  | 1,034,020 |  |  | 1,039,719 |  |  | 9 |  | % | 17 |  | %
Total interest-bearing liabilities | 27,327,069 |  |  | 22,052,397 |  |  | 19,065,988 |  |  | 19,297,260 |  |  | 19,502,829 |  |  | 24 |  | % | 40 |  | %
Noninterest-bearing deposits | 7,843,239 |  |  | 6,972,912 |  |  | 6,411,160 |  |  | 6,280,472 |  |  | 6,051,510 |  |  | 12 |  | % | 30 |  | %
Fixed income payables | 27,913 |  |  | 53,401 |  |  | 28,455 |  |  | 36,083 |  |  | 22,843 |  |  | (48 | ) | % | 22 |  | %
Derivative liabilities | 72,157 |  |  | 65,843 |  |  | 80,916 |  |  | 85,119 |  |  | 84,928 |  |  | 10 |  | % | (15 | ) | %
Other liabilities | 506,430 |  |  | 455,536 |  |  | 421,551 |  |  | 399,247 |  |  | 421,328 |  |  | 11 |  | % | 20 |  | %
Total liabilities | 35,776,808 |  |  | 29,600,089 |  |  | 26,008,070 |  |  | 26,098,181 |  |  | 26,083,438 |  |  | 21 |  | % | 37 |  | %
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 204,332 |  |  | 165,991 |  |  | 146,354 |  |  | 146,246 |  |  | 146,098 |  |  | 23 |  | % | 40 |  | %
Capital surplus | 3,151,931 |  |  | 1,993,908 |  |  | 1,397,883 |  |  | 1,392,718 |  |  | 1,389,062 |  |  | 58 |  | % | NM |  |
Undivided profits | 1,192,462 |  |  | 1,194,840 |  |  | 1,159,451 |  |  | 1,085,326 |  |  | 1,044,388 |  |  | * |  |  | 14 |  | %
Accumulated other comprehensive loss, net (h) | (365,864 | ) |  | (239,629 | ) |  | (227,986 | ) |  | (237,176 | ) |  | (247,935 | ) |  | 53 |  | % | 48 |  | %
Preferred stock | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | * |  |  | * |  |
Noncontrolling interest (i) | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | * |  |  | * |  |
Total equity | 4,573,916 |  |  | 3,506,165 |  |  | 2,866,757 |  |  | 2,778,169 |  |  | 2,722,668 |  |  | 30 |  | % | 68 |  | %
Total liabilities and equity | $ | 40,350,724 |  |  | $ | 33,106,254 |  |  | $ | 28,874,827 |  |  | $ | 28,876,350 |  |  | $ | 28,806,106 |  |  | 22 |  | % | 40 |  | %

NM - Not meaningful
*Amount is less than one percent.
(a) 1Q18 includes the average impact of three months of balances related to the CBF acquisition compared to one month in 4Q17.
(b) Includes loans on nonaccrual status.
(c) 1Q18 increase driven by the CBF acquisition; 2Q17 increase driven by the Coastal acquisition.
(d) Effective 1/1/18 FHN adopted ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of all equity investments from investment securities to other assets.
(e) Includes excess balances held at Fed; 1Q17 level largely driven by an inflow of customer deposits; 2Q17 and 3Q17 decreases due to loan growth and the Coastal acquisition.
(f) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.
(g) Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels.
(h) 1Q18 increase reflects the early adoption of ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," and an increase in unrealized losses on AFS securities.
(i) Consists of preferred stock of subsidiaries.
9

FHN CONSOLIDATED NET INTEREST INCOME (a)
Quarterly, Unaudited

| (b) |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Thousands) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Interest Income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income (c) | $ | 301,411 |  |  | $ | 242,950 |  |  | $ | 207,845 |  |  | $ | 195,162 |  |  | $ | 183,031 |  |  | 24 |  | % | 65 |  | %
Loans held-for-sale | 12,144 |  |  | 6,601 |  |  | 6,123 |  |  | 3,510 |  |  | 1,283 |  |  | 84 |  | % | NM |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 31,870 |  |  | 25,911 |  |  | 23,844 |  |  | 24,122 |  |  | 24,221 |  |  | 23 |  | % | 32 |  | %
States and municipalities | — |  |  | 3 |  |  | — |  |  | — |  |  | 101 |  |  | NM |  |  | NM |  |
Corporate bonds | 745 |  |  | 355 |  |  | 131 |  |  | 132 |  |  | 131 |  |  | NM |  |  | NM |  |
Other (d) | 363 |  |  | 2,015 |  |  | 1,731 |  |  | 1,535 |  |  | 1,414 |  |  | (82 | ) | % | (74 | ) | %
Total investment securities | 32,978 |  |  | 28,284 |  |  | 25,706 |  |  | 25,789 |  |  | 25,867 |  |  | 17 |  | % | 27 |  | %
Trading securities | 14,537 |  |  | 11,285 |  |  | 8,604 |  |  | 9,846 |  |  | 6,602 |  |  | 29 |  | % | NM |  |
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 145 |  |  | 113 |  |  | 131 |  |  | 146 |  |  | 54 |  |  | 28 |  | % | NM |  |
Securities purchased under agreements to resell | 2,503 |  |  | 1,652 |  |  | 1,476 |  |  | 1,442 |  |  | 590 |  |  | 52 |  | % | NM |  |
Interest-bearing cash | 1,684 |  |  | 1,484 |  |  | 1,226 |  |  | 2,456 |  |  | 4,235 |  |  | 13 |  | % | (60 | ) | %
Total other earning assets | 4,332 |  |  | 3,249 |  |  | 2,833 |  |  | 4,044 |  |  | 4,879 |  |  | 33 |  | % | (11 | ) | %
Interest income | $ | 365,402 |  |  | $ | 292,369 |  |  | $ | 251,111 |  |  | $ | 238,351 |  |  | $ | 221,662 |  |  | 25 |  | % | 65 |  | %
Interest Expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 7,534 |  |  | $ | 4,977 |  |  | $ | 5,032 |  |  | $ | 5,448 |  |  | $ | 3,852 |  |  | 51 |  | % | 96 |  | %
Commercial interest | 12,127 |  |  | 7,220 |  |  | 4,970 |  |  | 4,797 |  |  | 3,927 |  |  | 68 |  | % | NM |  |
Market-indexed (e) | 15,372 |  |  | 12,272 |  |  | 10,266 |  |  | 8,941 |  |  | 8,407 |  |  | 25 |  | % | 83 |  | %
Total interest-bearing deposits | 35,033 |  |  | 24,469 |  |  | 20,268 |  |  | 19,186 |  |  | 16,186 |  |  | 43 |  | % | NM |  |
Federal funds purchased | 1,738 |  |  | 1,387 |  |  | 1,173 |  |  | 1,106 |  |  | 1,056 |  |  | 25 |  | % | 65 |  | %
Securities sold under agreements to repurchase | 1,901 |  |  | 1,175 |  |  | 1,815 |  |  | 1,081 |  |  | 89 |  |  | 62 |  | % | NM |  |
Trading liabilities | 5,124 |  |  | 4,186 |  |  | 3,298 |  |  | 4,203 |  |  | 3,781 |  |  | 22 |  | % | 36 |  | %
Other short-term borrowings | 6,403 |  |  | 4,145 |  |  | 2,012 |  |  | 716 |  |  | 247 |  |  | 54 |  | % | NM |  |
Term borrowings | 11,983 |  |  | 10,183 |  |  | 9,762 |  |  | 8,348 |  |  | 7,744 |  |  | 18 |  | % | 55 |  | %
Interest expense | 62,182 |  |  | 45,545 |  |  | 38,328 |  |  | 34,640 |  |  | 29,103 |  |  | 37 |  | % | NM |  |
Net interest income - tax equivalent basis | 303,220 |  |  | 246,824 |  |  | 212,783 |  |  | 203,711 |  |  | 192,559 |  |  | 23 |  | % | 57 |  | %
Fully taxable equivalent adjustment | (2,047 | ) |  | (4,736 | ) |  | (2,966 | ) |  | (3,010 | ) |  | (2,851 | ) |  | 57 |  | % | 28 |  | %
Net interest income | $ | 301,173 |  |  | $ | 242,088 |  |  | $ | 209,817 |  |  | $ | 200,701 |  |  | $ | 189,708 |  |  | 24 |  | % | 59 |  | %

NM - Not meaningful
(a) Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 21 percent and, where applicable, state income taxes.
(b) 1Q18 includes three months of activity related to the CBF acquisition compared to one month of activity in 4Q17.
(c) Includes interest on loans in nonaccrual status.
(d) 1Q18 decrease driven by the adoption of ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of interest and dividend income on equity securities to noninterest income on a prospective basis. The remaining balance is primarily comprised of interest earned on SBA IO strips.
(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.
10

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

| 1Q18 |  |  |  | 4Q17 |  |  |  | 3Q17 |  |  |  | 2Q17 |  |  |  | 1Q17 |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earning assets (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income (b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans | 4.53 |  | % |  | 4.27 |  | % |  | 4.13 |  | % |  | 4.03 |  | % |  | 3.86 |  | %
Consumer loans | 4.48 |  |  |  | 4.33 |  |  |  | 4.23 |  |  |  | 4.21 |  |  |  | 4.13 |  |
Total loans, net of unearned income (c) | 4.51 |  |  |  | 4.28 |  |  |  | 4.16 |  |  |  | 4.08 |  |  |  | 3.94 |  |
Loans held-for-sale | 6.68 |  |  |  | 5.23 |  |  |  | 4.53 |  |  |  | 4.38 |  |  |  | 4.64 |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 2.66 |  |  |  | 2.56 |  |  |  | 2.54 |  |  |  | 2.57 |  |  |  | 2.59 |  |
States and municipalities | 3.37 |  |  |  | 7.04 |  |  |  | — |  |  |  | — |  |  |  | 9.33 |  |
Corporate bonds | 4.54 |  |  |  | 4.74 |  |  |  | 5.25 |  |  |  | 5.25 |  |  |  | 5.25 |  |
Other (d) | 27.65 |  |  |  | 3.96 |  |  |  | 3.67 |  |  |  | 3.26 |  |  |  | 3.03 |  |
Total investment securities | 2.71 |  |  |  | 2.65 |  |  |  | 2.60 |  |  |  | 2.61 |  |  |  | 2.63 |  |
Trading securities | 3.40 |  |  |  | 3.14 |  |  |  | 3.06 |  |  |  | 3.07 |  |  |  | 2.84 |  |
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 2.11 |  |  |  | 1.79 |  |  |  | 1.75 |  |  |  | 1.58 |  |  |  | 1.28 |  |
Securities purchased under agreements to resell | 1.15 |  |  |  | 0.80 |  |  |  | 0.88 |  |  |  | 0.69 |  |  |  | 0.35 |  |
Interest-bearing cash | 1.42 |  |  |  | 1.28 |  |  |  | 1.24 |  |  |  | 1.02 |  |  |  | 0.81 |  |
Total other earning assets | 1.26 |  |  |  | 0.99 |  |  |  | 1.03 |  |  |  | 0.88 |  |  |  | 0.70 |  |
Interest income/total earning assets | 4.13 |  | % |  | 3.87 |  | % |  | 3.76 |  | % |  | 3.59 |  | % |  | 3.37 |  | %
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | 0.24 |  | % |  | 0.19 |  | % |  | 0.22 |  | % |  | 0.23 |  | % |  | 0.17 |  | %
Commercial interest | 0.89 |  |  |  | 0.78 |  |  |  | 0.69 |  |  |  | 0.62 |  |  |  | 0.51 |  |
Market-indexed (e) | 1.47 |  |  |  | 1.23 |  |  |  | 1.16 |  |  |  | 0.94 |  |  |  | 0.73 |  |
Total interest-bearing deposits | 0.64 |  |  |  | 0.54 |  |  |  | 0.51 |  |  |  | 0.47 |  |  |  | 0.39 |  |
Federal funds purchased | 1.52 |  |  |  | 1.29 |  |  |  | 1.24 |  |  |  | 1.02 |  |  |  | 0.77 |  |
Securities sold under agreements to repurchase | 1.02 |  |  |  | 0.78 |  |  |  | 1.06 |  |  |  | 0.70 |  |  |  | 0.09 |  |
Trading liabilities | 2.53 |  |  |  | 2.24 |  |  |  | 2.19 |  |  |  | 2.21 |  |  |  | 2.39 |  |
Other short-term borrowings | 1.53 |  |  |  | 1.32 |  |  |  | 1.22 |  |  |  | 1.30 |  |  |  | 1.24 |  |
Term borrowings (f) | 3.93 |  |  |  | 3.63 |  |  |  | 3.51 |  |  |  | 3.23 |  |  |  | 2.98 |  |
Interest expense/total interest-bearing liabilities | 0.92 |  |  |  | 0.82 |  |  |  | 0.80 |  |  |  | 0.72 |  |  |  | 0.60 |  |
Net interest spread | 3.21 |  | % |  | 3.05 |  | % |  | 2.96 |  | % |  | 2.87 |  | % |  | 2.77 |  | %
Effect of interest-free sources used to fund earning assets | 0.22 |  |  |  | 0.22 |  |  |  | 0.23 |  |  |  | 0.20 |  |  |  | 0.15 |  |
Net interest margin | 3.43 |  | % |  | 3.27 |  | % |  | 3.19 |  | % |  | 3.07 |  | % |  | 2.92 |  | %

Yields are adjusted to a FTE basis assuming a statutory federal income tax rate of 21 percent and, where applicable, state income taxes.
(a) Earning assets yields are expressed net of unearned income.
(b) Includes loan fees and cash basis interest income.
(c) Includes loans on nonaccrual status.
(d) 1Q18 increase driven by the adoption of ASU 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" which resulted in the reclassification of interest and dividend income on equity securities to noninterest income on a prospective basis. The remaining balance is primarily comprised of higher-yielding SBA IO strips.
(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.
11

FHN CAPITAL HIGHLIGHTS
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Dollars and shares in thousands) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Common equity tier 1 capital (a) (b) | $ | 2,991,223 |  |  | $ | 2,962,155 |  |  | $ | 2,477,210 |  |  | $ | 2,418,578 |  |  | $ | 2,409,219 |  |  | 1 |  | % | 24 |  | %
Tier 1 capital (a) (b) | 3,324,632 |  |  | 3,281,478 |  |  | 2,764,780 |  |  | 2,699,698 |  |  | 2,680,869 |  |  | 1 |  | % | 24 |  | %
Total capital (a) | 3,746,363 |  |  | 3,703,754 |  |  | 3,005,198 |  |  | 2,942,948 |  |  | 2,926,292 |  |  | 1 |  | % | 28 |  | %
Risk-weighted assets (“RWA”) (a) (b) | 33,299,500 |  |  | 33,373,877 |  |  | 24,678,030 |  |  | 24,566,487 |  |  | 23,623,224 |  |  | * |  |  | 41 |  | %
Average assets for leverage (a) (b) (c) | 39,126,765 |  |  | 31,824,751 |  |  | 28,793,816 |  |  | 28,793,889 |  |  | 28,805,253 |  |  | 23 |  | % | 36 |  | %
Common equity tier 1 ratio (a) (b) | 8.98 |  | % | 8.88 |  | % | 10.04 |  | % | 9.85 |  | % | 10.20 |  | % |  |  |  |  |  |
Tier 1 ratio (a) (b) | 9.98 |  | % | 9.83 |  | % | 11.20 |  | % | 10.99 |  | % | 11.35 |  | % |  |  |  |  |  |
Total capital ratio (a) | 11.25 |  | % | 11.10 |  | % | 12.18 |  | % | 11.98 |  | % | 12.39 |  | % |  |  |  |  |  |
Leverage ratio (a) (b) (d) | 8.50 |  | % | 10.31 |  | % | 9.60 |  | % | 9.38 |  | % | 9.31 |  | % |  |  |  |  |  |
Total equity to total assets | 11.30 |  | % | 11.06 |  | % | 9.73 |  | % | 9.63 |  | % | 9.25 |  | % |  |  |  |  |  |
Tangible common equity/tangible assets (“TCE/TA”) (e) | 6.71 |  | % | 6.57 |  | % | 7.54 |  | % | 7.41 |  | % | 7.27 |  | % |  |  |  |  |  |
Period-end shares outstanding | 327,194 |  |  | 326,736 |  |  | 234,231 |  |  | 234,135 |  |  | 233,883 |  |  | * |  |  | 40 |  | %
Cash dividends declared per common share | $ | 0.12 |  |  | $ | 0.09 |  |  | $ | 0.09 |  |  | $ | 0.09 |  |  | $ | 0.09 |  |  | 33 |  | % | 33 |  | %
Book value per common share | $ | 12.78 |  |  | $ | 12.82 |  |  | $ | 10.64 |  |  | $ | 10.40 |  |  | $ | 10.05 |  |  |  |  |  |  |  |
Tangible book value per common share (e) | $ | 7.97 |  |  | $ | 8.01 |  |  | $ | 9.45 |  |  | $ | 9.20 |  |  | $ | 9.14 |  |  |  |  |  |  |  |
Market capitalization (millions) | $ | 6,161.1 |  |  | $ | 6,531.5 |  |  | $ | 4,485.5 |  |  | $ | 4,078.6 |  |  | $ | 4,326.8 |  |  |  |  |  |  |  |

Certain previously reported amounts have been reclassified to agree with current presentation.
* Amount is less than one percent.
(a) Current quarter is an estimate.
(b) See Glossary of Terms for definition.
(c) 1Q18 increase driven by the average impact of three months of balances related to the CBF acquisition compared to one month in 4Q17.
(d) 1Q18 decrease is driven by an increase in average assets for leverage (ratio denominator) due to the timing of the CBF acquisition late in 4Q17 (full quarter average impact in 1Q18 compared to one month in 4Q17).
(e) 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 21 of this financial supplement.
12

FHN BUSINESS SEGMENT HIGHLIGHTS
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Thousands) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 298,699 |  |  | $ | 244,021 |  |  | $ | 208,975 |  |  | $ | 201,658 |  |  | $ | 193,082 |  |  | 22 |  | % | 55 |  | %
Noninterest income | 78,853 |  |  | 70,526 |  |  | 64,370 |  |  | 64,740 |  |  | 58,978 |  |  | 12 |  | % | 34 |  | %
Total revenues | 377,552 |  |  | 314,547 |  |  | 273,345 |  |  | 266,398 |  |  | 252,060 |  |  | 20 |  | % | 50 |  | %
Provision for loan losses | 5,312 |  |  | 9,737 |  |  | 8,552 |  |  | 260 |  |  | 3,098 |  |  | (45 | ) | % | 71 |  | %
Noninterest expense (a) | 205,201 |  |  | 178,605 |  |  | 150,445 |  |  | 152,637 |  |  | 148,050 |  |  | 15 |  | % | 39 |  | %
Income before income taxes | 167,039 |  |  | 126,205 |  |  | 114,348 |  |  | 113,501 |  |  | 100,912 |  |  | 32 |  | % | 66 |  | %
Provision for income taxes | 39,362 |  |  | 43,899 |  |  | 41,143 |  |  | 41,015 |  |  | 36,476 |  |  | (10 | ) | % | 8 |  | %
Net income | $ | 127,677 |  |  | $ | 82,306 |  |  | $ | 73,205 |  |  | $ | 72,486 |  |  | $ | 64,436 |  |  | 55 |  | % | 98 |  | %
Fixed Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 8,463 |  |  | $ | 5,906 |  |  | $ | 5,985 |  |  | $ | 4,985 |  |  | $ | 1,156 |  |  | 43 |  | % | NM |  |
Noninterest income | 45,605 |  |  | 55,250 |  |  | 55,803 |  |  | 55,207 |  |  | 50,823 |  |  | (17 | ) | % | (10 | ) | %
Total revenues | 54,068 |  |  | 61,156 |  |  | 61,788 |  |  | 60,192 |  |  | 51,979 |  |  | (12 | ) | % | 4 |  | %
Noninterest expense | 50,544 |  |  | 55,151 |  |  | 53,136 |  |  | 54,022 |  |  | 48,707 |  |  | (8 | ) | % | 4 |  | %
Income before income taxes | 3,524 |  |  | 6,005 |  |  | 8,652 |  |  | 6,170 |  |  | 3,272 |  |  | (41 | ) | % | 8 |  | %
Provision for income taxes | 742 |  |  | 1,971 |  |  | 2,970 |  |  | 1,941 |  |  | 1,018 |  |  | (62 | ) | % | (27 | ) | %
Net income | $ | 2,782 |  |  | $ | 4,034 |  |  | $ | 5,682 |  |  | $ | 4,229 |  |  | $ | 2,254 |  |  | (31 | ) | % | 23 |  | %
Corporate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income/(expense) | $ | (13,190 | ) |  | $ | (15,593 | ) |  | $ | (13,646 | ) |  | $ | (14,637 | ) |  | $ | (13,771 | ) |  | 15 |  | % | 4 |  | %
Noninterest income (b) | 9,479 |  |  | 6,711 |  |  | (9,476 | ) |  | 6,219 |  |  | 5,476 |  |  | 41 |  | % | 73 |  | %
Total revenues | (3,711 | ) |  | (8,882 | ) |  | (23,122 | ) |  | (8,418 | ) |  | (8,295 | ) |  | 58 |  | % | 55 |  | %
Noninterest expense (c) | 51,116 |  |  | 73,991 |  |  | 23,926 |  |  | 24,566 |  |  | 16,874 |  |  | (31 | ) | % | NM |  |
Loss before income taxes | (54,827 | ) |  | (82,873 | ) |  | (47,048 | ) |  | (32,984 | ) |  | (25,169 | ) |  | 34 |  | % | NM |  |
Provision/ (benefit) for income taxes (d) | (12,444 | ) |  | 37,202 |  |  | (34,120 | ) |  | (35,574 | ) |  | (12,929 | ) |  | NM |  |  | 4 |  | %
Net income/(loss) | $ | (42,383 | ) |  | $ | (120,075 | ) |  | $ | (12,928 | ) |  | $ | 2,590 |  |  | $ | (12,240 | ) |  | 65 |  | % | NM |  |
Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 7,201 |  |  | $ | 7,754 |  |  | $ | 8,503 |  |  | $ | 8,695 |  |  | $ | 9,241 |  |  | (7 | ) | % | (22 | ) | %
Noninterest income | 2,080 |  |  | 703 |  |  | 1,720 |  |  | 1,507 |  |  | 1,662 |  |  | NM |  |  | 25 |  | %
Total revenues | 9,281 |  |  | 8,457 |  |  | 10,223 |  |  | 10,202 |  |  | 10,903 |  |  | 10 |  | % | (15 | ) | %
Provision/(provision credit) for loan losses | (6,312 | ) |  | (6,737 | ) |  | (8,552 | ) |  | (2,260 | ) |  | (4,098 | ) |  | 6 |  | % | (54 | ) | %
Noninterest expense (e) | 6,404 |  |  | 38,923 |  |  | 9,362 |  |  | (13,308 | ) |  | 8,574 |  |  | (84 | ) | % | (25 | ) | %
Income/(loss) before income taxes | 9,189 |  |  | (23,729 | ) |  | 9,413 |  |  | 25,770 |  |  | 6,427 |  |  | NM |  |  | 43 |  | %
Provision/(benefit) for income taxes | 2,271 |  |  | (9,083 | ) |  | 3,603 |  |  | 9,871 |  |  | 2,489 |  |  | NM |  |  | (9 | ) | %
Net income/(loss) | $ | 6,918 |  |  | $ | (14,646 | ) |  | $ | 5,810 |  |  | $ | 15,899 |  |  | $ | 3,938 |  |  | NM |  |  | 76 |  | %
Total Consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 301,173 |  |  | $ | 242,088 |  |  | $ | 209,817 |  |  | $ | 200,701 |  |  | $ | 189,708 |  |  | 24 |  | % | 59 |  | %
Noninterest income | 136,017 |  |  | 133,190 |  |  | 112,417 |  |  | 127,673 |  |  | 116,939 |  |  | 2 |  | % | 16 |  | %
Total revenues | 437,190 |  |  | 375,278 |  |  | 322,234 |  |  | 328,374 |  |  | 306,647 |  |  | 16 |  | % | 43 |  | %
Provision/(provision credit) for loan losses | (1,000 | ) |  | 3,000 |  |  | — |  |  | (2,000 | ) |  | (1,000 | ) |  | NM |  |  | * |  |
Noninterest expense | 313,265 |  |  | 346,670 |  |  | 236,869 |  |  | 217,917 |  |  | 222,205 |  |  | (10 | ) | % | 41 |  | %
Income before income taxes | 124,925 |  |  | 25,608 |  |  | 85,365 |  |  | 112,457 |  |  | 85,442 |  |  | NM |  |  | 46 |  | %
Provision for income taxes | 29,931 |  |  | 73,989 |  |  | 13,596 |  |  | 17,253 |  |  | 27,054 |  |  | (60 | ) | % | 11 |  | %
Net income/(loss) | $ | 94,994 |  |  | $ | (48,381 | ) |  | $ | 71,769 |  |  | $ | 95,204 |  |  | $ | 58,388 |  |  | NM |  |  | 63 |  | %

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not meaningful
* Amount is less than one percent.

(a) | 3Q17 includes $4.4 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) | 1Q18 and 4Q17 include $31.4 million and $46.7 million, respectively of acquisition-related expenses primarily associated with the CBF acquisition; 3Q17 and 2Q17 include $8.2 million and $6.4 million, respectively of acquisition-related expenses primarily associated with the CBF and Coastal acquisitions.

(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) | 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.

13

FHN REGIONAL BANKING
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
| 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 298,699 |  |  | $ | 244,021 |  |  | $ | 208,975 |  |  | $ | 201,658 |  |  | $ | 193,082 |  |  | 22 |  | % | 55 |  | %
Provision for loan losses | 5,312 |  |  | 9,737 |  |  | 8,552 |  |  | 260 |  |  | 3,098 |  |  | (45 | ) | % | 71 |  | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NSF / Overdraft fees (a) | 8,629 |  |  | 10,101 |  |  | 9,878 |  |  | 8,717 |  |  | 6,309 |  |  | (15 | ) | % | 37 |  | %
Cash management fees | 9,285 |  |  | 9,396 |  |  | 8,923 |  |  | 9,641 |  |  | 9,196 |  |  | (1 | ) | % | 1 |  | %
Debit card income | 3,588 |  |  | 3,685 |  |  | 3,635 |  |  | 3,655 |  |  | 3,405 |  |  | (3 | ) | % | 5 |  | %
Other | 8,416 |  |  | 5,694 |  |  | 4,185 |  |  | 4,421 |  |  | 4,324 |  |  | 48 |  | % | 95 |  | %
Total deposit transactions and cash management | 29,918 |  |  | 28,876 |  |  | 26,621 |  |  | 26,434 |  |  | 23,234 |  |  | 4 |  | % | 29 |  | %
Brokerage, management fees and commissions | 13,483 |  |  | 12,642 |  |  | 11,936 |  |  | 12,029 |  |  | 11,906 |  |  | 7 |  | % | 13 |  | %
Trust services and investment management | 7,292 |  |  | 7,131 |  |  | 6,968 |  |  | 7,713 |  |  | 6,680 |  |  | 2 |  | % | 9 |  | %
Bankcard income | 11,115 |  |  | 8,125 |  |  | 6,057 |  |  | 5,495 |  |  | 5,342 |  |  | 37 |  | % | NM |  |
Other service charges | 4,636 |  |  | 3,109 |  |  | 2,613 |  |  | 2,740 |  |  | 2,632 |  |  | 49 |  | % | 76 |  | %
Miscellaneous revenue (b) | 12,409 |  |  | 10,643 |  |  | 10,175 |  |  | 10,329 |  |  | 9,184 |  |  | 17 |  | % | 35 |  | %
Total noninterest income | 78,853 |  |  | 70,526 |  |  | 64,370 |  |  | 64,740 |  |  | 58,978 |  |  | 12 |  | % | 34 |  | %
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation, incentives, and benefits | 89,406 |  |  | 74,561 |  |  | 59,337 |  |  | 61,561 |  |  | 60,988 |  |  | 20 |  | % | 47 |  | %
Other (c) | 115,795 |  |  | 104,044 |  |  | 91,108 |  |  | 91,076 |  |  | 87,062 |  |  | 11 |  | % | 33 |  | %
Total noninterest expense | 205,201 |  |  | 178,605 |  |  | 150,445 |  |  | 152,637 |  |  | 148,050 |  |  | 15 |  | % | 39 |  | %
Income before income taxes | $ | 167,039 |  |  | $ | 126,205 |  |  | $ | 114,348 |  |  | $ | 113,501 |  |  | $ | 100,912 |  |  | 32 |  | % | 66 |  | %
PPNR (d) | 172,351 |  |  | 135,942 |  |  | 122,900 |  |  | 113,375 |  |  | 104,010 |  |  | 27 |  | % | 66 |  | %
Efficiency ratio (e) | 54.35 |  | % | 56.78 |  | % | 55.04 |  | % | 57.38 |  | % | 58.74 |  | % |  |  |  |  |  |
Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average loans | $ | 25,748 |  |  | $ | 21,147 |  |  | $ | 18,402 |  |  | $ | 17,679 |  |  | $ | 17,199 |  |  | 22 |  | % | 50 |  | %
Average other earning assets | 190 |  |  | 86 |  |  | 44 |  |  | 50 |  |  | 35 |  |  | NM |  |  | NM |  |
Total average earning assets | 25,938 |  |  | 21,233 |  |  | 18,446 |  |  | 17,729 |  |  | 17,234 |  |  | 22 |  | % | 51 |  | %
Total average deposits | 27,120 |  |  | 22,382 |  |  | 20,066 |  |  | 20,131 |  |  | 19,652 |  |  | 21 |  | % | 38 |  | %
Total period-end deposits | 27,653 |  |  | 27,538 |  |  | 20,076 |  |  | 20,416 |  |  | 20,532 |  |  | * |  |  | 35 |  | %
Total period-end assets | 28,668 |  |  | 29,035 |  |  | 19,600 |  |  | 19,333 |  |  | 18,329 |  |  | (1 | ) | % | 56 |  | %
Net interest margin (f) | 4.70 |  | % | 4.64 |  | % | 4.55 |  | % | 4.62 |  | % | 4.60 |  | % |  |  |  |
Net interest spread | 4.05 |  |  | 3.86 |  |  | 3.72 |  |  | 3.62 |  |  | 3.57 |  |  |  |  |  |  |  |
Loan average yield | 4.41 |  |  | 4.15 |  |  | 4.00 |  |  | 3.88 |  |  | 3.78 |  |  |  |  |  |  |  |
Deposit average rate | 0.36 |  |  | 0.29 |  |  | 0.28 |  |  | 0.26 |  |  | 0.21 |  |  |  |  |  |  |  |
Key Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial center locations | 345 |  |  | 347 |  |  | 163 |  |  | 163 |  |  | 162 |  |  | (1 | ) | % | 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.

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

(c) | 3Q17 includes $4.4 million of loss accruals related to legal matters.

(d) | 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.

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

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

14

FHN FIXED INCOME
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
| 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income (a) | $ | 8,463 |  |  | $ | 5,906 |  |  | $ | 5,985 |  |  | $ | 4,985 |  |  | $ | 1,156 |  |  | 43 |  | % | NM |  |
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income product revenue | 38,047 |  |  | 40,608 |  |  | 45,020 |  |  | 45,555 |  |  | 42,727 |  |  | (6 | ) | % | (11 | ) | %
Other | 7,558 |  |  | 14,642 |  |  | 10,783 |  |  | 9,652 |  |  | 8,096 |  |  | (48 | ) | % | (7 | ) | %
Total noninterest income | 45,605 |  |  | 55,250 |  |  | 55,803 |  |  | 55,207 |  |  | 50,823 |  |  | (17 | ) | % | (10 | ) | %
Noninterest expense | 50,544 |  |  | 55,151 |  |  | 53,136 |  |  | 54,022 |  |  | 48,707 |  |  | (8 | ) | % | 4 |  | %
Income before income taxes | $ | 3,524 |  |  | $ | 6,005 |  |  | $ | 8,652 |  |  | $ | 6,170 |  |  | $ | 3,272 |  |  | (41 | ) | % | 8 |  | %
Efficiency ratio (b) | 93.48 |  | % | 90.18 |  | % | 86.00 |  | % | 89.75 |  | % | 93.71 |  | % |  |  |  |  |  |
Fixed income product average daily revenue | $ | 624 |  |  | $ | 655 |  |  | $ | 715 |  |  | $ | 723 |  |  | $ | 689 |  |  | (5 | ) | % | (9 | ) | %
Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average trading inventory (a) | $ | 1,710 |  |  | $ | 1,437 |  |  | $ | 1,122 |  |  | $ | 1,281 |  |  | $ | 927 |  |  | 19 |  | % | 84 |  | %
Average loans held-for-sale (a) | 487 |  |  | 363 |  |  | 443 |  |  | 220 |  |  | 7 |  |  | 34 |  | % | NM |  |
Average other earning assets | 933 |  |  | 850 |  |  | 690 |  |  | 851 |  |  | 696 |  |  | 10 |  | % | 34 |  | %
Total average earning assets | 3,130 |  |  | 2,650 |  |  | 2,255 |  |  | 2,352 |  |  | 1,630 |  |  | 18 |  | % | 92 |  | %
Total period-end assets | 3,655 |  |  | 2,989 |  |  | 2,751 |  |  | 2,745 |  |  | 2,395 |  |  | 22 |  | % | 53 |  | %
Net interest margin (c) | 1.09 |  | % | 0.94 |  | % | 1.13 |  | % | 0.92 |  | % | 0.33 |  | % |  |  |  |  |  |

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 21 percent and, where
applicable, state income taxes.
FHN CORPORATE
Quarterly, Unaudited

|  | 1Q18 Changes vs.
| 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income/(expense) | $ | (13,190 | ) |  | $ | (15,593 | ) |  | $ | (13,646 | ) |  | $ | (14,637 | ) |  | $ | (13,771 | ) |  | 15 |  | % | 4 |  | %
Noninterest income excluding securities gains/(losses) (a) | 9,393 |  |  | 6,574 |  |  | (9,482 | ) |  | 6,200 |  |  | 5,432 |  |  | 43 |  | % | 73 |  | %
Securities gains/(losses), net | 86 |  |  | 137 |  |  | 6 |  |  | 19 |  |  | 44 |  |  | (37 | ) | % | 95 |  | %
Noninterest expense (b) | 51,116 |  |  | 73,991 |  |  | 23,926 |  |  | 24,566 |  |  | 16,874 |  |  | (31 | ) | % | NM |  |
Loss before income taxes | $ | (54,827 | ) |  | $ | (82,873 | ) |  | $ | (47,048 | ) |  | $ | (32,984 | ) |  | $ | (25,169 | ) |  | 34 |  | % | NM |  |
Average Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average investment securities | $ | 4,859 |  |  | $ | 4,273 |  |  | $ | 3,959 |  |  | $ | 3,950 |  |  | $ | 3,931 |  |  | 14 |  | % | 24 |  | %
Total earning assets | $ | 5,382 |  |  | $ | 4,792 |  |  | $ | 4,408 |  |  | $ | 4,983 |  |  | $ | 6,121 |  |  | 12 |  | % | (12 | ) | %

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not Meaningful
(a) 1Q18 includes a $3.3 million gain on the sale of a building; 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) 1Q18 includes $31.4 million of acquisition-related expenses primarily associated with the CBF acquisition; 4Q17 includes $46.7 million of acquisition-related expenses primarily associated with the CBF acquisition 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.
15

FHN NON-STRATEGIC
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
|  | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |  | 4Q17 | 1Q17
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 7,201 |  |  | $ | 7,754 |  |  | $ | 8,503 |  |  | $ | 8,695 |  |  | $ | 9,241 |  |  | (7 | ) | % | (22 | ) | %
Provision/(provision credit) for loan losses |  | (6,312 | ) |  | (6,737 | ) |  | (8,552 | ) |  | (2,260 | ) |  | (4,098 | ) |  | 6 |  | % | (54 | ) | %
Noninterest income |  | 2,080 |  |  | 703 |  |  | 1,720 |  |  | 1,507 |  |  | 1,662 |  |  | NM |  |  | 25 |  | %
Noninterest expense (a) |  | 6,404 |  |  | 38,923 |  |  | 9,362 |  |  | (13,308 | ) |  | 8,574 |  |  | (84 | ) | % | (25 | ) | %
Income/(loss) before income taxes |  | $ | 9,189 |  |  | $ | (23,729 | ) |  | $ | 9,413 |  |  | $ | 25,770 |  |  | $ | 6,427 |  |  | NM |  |  | 43 |  | %
Average Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans |  | $ | 1,213 |  |  | $ | 1,282 |  |  | $ | 1,358 |  |  | $ | 1,441 |  |  | $ | 1,535 |  |  | (5 | ) | % | (21 | ) | %
Other assets |  | 71 |  |  | 73 |  |  | 73 |  |  | 81 |  |  | 81 |  |  | (3 | ) | % | (12 | ) | %
Total assets |  | 1,284 |  |  | 1,355 |  |  | 1,431 |  |  | 1,522 |  |  | 1,616 |  |  | (5 | ) | % | (21 | ) | %
Net interest margin (b) |  | 2.24 |  | % | 2.26 |  | % | 2.34 |  | % | 2.27 |  | % | 2.28 |  | % |  |  |  |  |  |
Efficiency ratio (c) |  | 69.00 |  | % | NM |  |  | 91.58 |  | % | NM |  |  | 78.64 |  | % |  |  |  |  |  |

Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not meaningful
(a) 4Q17 includes $32.0 million of loss accruals related to legal matters;3Q17 includes $3.6 million of loss accrual 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.
(b) Net interest margin is computed using total net interest income adjusted for FTE assuming a statutory federal income tax rate of 21 percent and, where applicable, state income taxes.
(c) Noninterest expense divided by total revenue excluding securities gains/(losses).
16

FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
(Dollars in thousands) |  | 1Q18 |  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q17 |  | 1Q17
Allowance for Loan Losses Walk-Forward |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning reserve |  | $ | 189,555 |  |  | $ | 194,867 |  |  | $ | 197,257 |  |  | $ | 201,968 |  |  | $ | 202,068 |  |  | (3)% |  | (6)%
Provision/(provision credit) for loan losses |  | (1,000 | ) |  | 3,000 |  |  | — |  |  | (2,000 | ) |  | (1,000 | ) |  | NM |  | *
Charge-offs |  | (8,348 | ) |  | (17,481 | ) |  | (10,670 | ) |  | (9,830 | ) |  | (8,413 | ) |  | 52% |  | 1%
Recoveries |  | 6,987 |  |  | 9,169 |  |  | 8,280 |  |  | 7,119 |  |  | 9,313 |  |  | (24)% |  | (25)%
Ending balance |  | $ | 187,194 |  |  | $ | 189,555 |  |  | $ | 194,867 |  |  | $ | 197,257 |  |  | $ | 201,968 |  |  | (1)% |  | (7)%
Reserve for unfunded commitments |  | 4,613 |  |  | 5,079 |  |  | 4,372 |  |  | 5,554 |  |  | 5,284 |  |  | (9)% |  | (13)%
Total allowance for loan losses plus reserve for unfunded commitments |  | $ | 191,807 |  |  | $ | 194,634 |  |  | $ | 199,239 |  |  | $ | 202,811 |  |  | $ | 207,252 |  |  | (1)% |  | (7)%
Allowance for Loan Losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  | $ | 155,873 |  |  | $ | 154,111 |  |  | $ | 156,021 |  |  | $ | 153,208 |  |  | $ | 155,968 |  |  | 1% |  | *
Non-Strategic |  | 31,321 |  |  | 35,444 |  |  | 38,846 |  |  | 44,049 |  |  | 46,000 |  |  | (12)% |  | (32)%
Total allowance for loan losses |  | $ | 187,194 |  |  | $ | 189,555 |  |  | $ | 194,867 |  |  | $ | 197,257 |  |  | $ | 201,968 |  |  | (1)% |  | (7)%
Nonperforming Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 57,767 |  |  | $ | 52,659 |  |  | $ | 40,610 |  |  | $ | 43,012 |  |  | $ | 49,462 |  |  | 10% |  | 17%
OREO (a) |  | 27,806 |  |  | 34,844 |  |  | 2,848 |  |  | 3,266 |  |  | 4,422 |  |  | (20)% |  | NM
Total Regional Banking |  | $ | 85,573 |  |  | $ | 87,503 |  |  | $ | 43,458 |  |  | $ | 46,278 |  |  | $ | 53,884 |  |  | (2)% |  | 59%
Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 72,124 |  |  | $ | 75,803 |  |  | $ | 82,203 |  |  | $ | 84,959 |  |  | $ | 92,409 |  |  | (5)% |  | (22)%
Nonperforming loans held-for-sale after fair value adjustments |  | 8,258 |  |  | 6,971 |  |  | 7,314 |  |  | 7,321 |  |  | 7,633 |  |  | 18% |  | 8%
OREO (a) |  | 4,569 |  |  | 4,722 |  |  | 5,029 |  |  | 3,772 |  |  | 5,837 |  |  | (3)% |  | (22)%
Total Non-Strategic |  | $ | 84,951 |  |  | $ | 87,496 |  |  | $ | 94,546 |  |  | $ | 96,052 |  |  | $ | 105,879 |  |  | (3)% |  | (20)%
Corporate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 2,140 |  |  | $ | 2,157 |  |  | $ | 2,173 |  |  | $ | 1,819 |  |  | $ | 1,521 |  |  | (1)% |  | 41%
Total nonperforming assets (a) |  | $ | 172,664 |  |  | $ | 177,156 |  |  | $ | 140,177 |  |  | $ | 144,149 |  |  | $ | 161,284 |  |  | (3)% |  | 7%
Net Charge-Offs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  | $ | 3,550 |  |  | $ | 11,647 |  |  | $ | 5,739 |  |  | $ | 3,020 |  |  | $ | 1,211 |  |  | (70)% |  | NM
Non-Strategic |  | (2,189 | ) |  | (3,335 | ) |  | (3,349 | ) |  | (309 | ) |  | (2,111 | ) |  | 34% |  | (4)%
Total net charge-offs/(recoveries) |  | $ | 1,361 |  |  | $ | 8,312 |  |  | $ | 2,390 |  |  | $ | 2,711 |  |  | $ | (900 | ) |  | (84)% |  | NM
Consolidated Key Ratios (b) (c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30+ Delinq. % (d) |  | 0.29 |  | % |  |  | 0.33 |  | % |  |  | 0.38 |  | % |  |  | 0.27 |  | % |  |  | 0.39 |  | % |  |  |  |  |
NPL % |  | 0.48 |  |  |  | 0.47 |  |  |  | 0.62 |  |  |  | 0.65 |  |  |  | 0.75 |  |  |  |  |  |
NPA % |  | 0.60 |  |  |  | 0.61 |  |  |  | 0.66 |  |  |  | 0.68 |  |  |  | 0.80 |  |  |  |  |  |
Net charge-offs % |  | 0.02 |  |  |  | 0.15 |  |  |  | 0.05 |  |  |  | 0.06 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % (e) |  | 0.69 |  |  |  | 0.69 |  |  |  | 0.97 |  |  |  | 0.99 |  |  |  | 1.06 |  |  |  |  |  |
Allowance / NPL |  | 1.42 |  | x |  |  | 1.45 |  | x |  |  | 1.56 |  | x |  |  | 1.52 |  | x |  |  | 1.41 |  | x |  |  |  |  |
Allowance / NPA |  | 1.14 |  | x |  |  | 1.11 |  | x |  |  | 1.47 |  | x |  |  | 1.44 |  | x |  |  | 1.31 |  | x |  |  |  |  |
Allowance / net charge-offs |  | 33.90 |  | x |  |  | 5.75 |  | x |  |  | 20.55 |  | x |  |  | 18.14 |  | x |  |  | NM |  |  |  |  |  |  |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans past due 90 days or more and still accruing (f) |  | $ | 52,700 |  |  | $ | 48,047 |  |  | $ | 41,025 |  |  | $ | 37,809 |  |  | $ | 37,156 |  |  | 10% |  | 42%
Guaranteed portion (f) |  | 9,076 |  |  | 9,454 |  |  | 10,046 |  |  | 15,276 |  |  | 14,569 |  |  | (4)% |  | (38)%
Period-end loans, net of unearned income (millions) |  | 27,250 |  |  | 27,659 |  |  | 20,166 |  |  | 19,989 |  |  | 19,090 |  |  | (1)% |  | 43%

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 4Q17 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.
17

FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
|  | 1Q18 |  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q17 |  | 1Q17
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 15,828 |  |  |  | $ | 16,057 |  |  |  | $ | 12,792 |  |  |  | $ | 12,598 |  |  |  | $ | 11,704 |  |  |  | (1)% |  | 35%
30+ Delinq. % (a) (b) |  | 0.16 |  | % |  | 0.19 |  | % |  | 0.27 |  | % |  | 0.03 |  | % |  | 0.17 |  | % |  |  |  |
NPL % |  | 0.18 |  |  |  | 0.19 |  |  |  | 0.15 |  |  |  | 0.20 |  |  |  | 0.26 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.02 |  |  |  | 0.28 |  |  |  | 0.10 |  |  |  | 0.04 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.63 |  | % |  | 0.61 |  | % |  | 0.77 |  | % |  | 0.73 |  | % |  | 0.80 |  | % |  |  |  |
Allowance / net charge-offs |  | 37.88 |  | x |  | 2.53 |  | x |  | 7.97 |  | x |  | 18.21 |  | x |  | NM |  |  |  |  |  |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 4,234 |  |  |  | $ | 4,215 |  |  |  | $ | 2,251 |  |  |  | $ | 2,212 |  |  |  | $ | 2,173 |  |  |  | * |  | 95%
30+ Delinq. % (a) |  | 0.08 |  | % |  | 0.11 |  | % |  | 0.02 |  | % |  | 0.01 |  | % |  | 0.03 |  | % |  |  |  |
NPL % |  | 0.02 |  |  |  | 0.03 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.11 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.69 |  | % |  | 0.67 |  | % |  | 1.32 |  | % |  | 1.38 |  | % |  | 1.42 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 6,247 |  |  |  | $ | 6,368 |  |  |  | $ | 4,370 |  |  |  | $ | 4,417 |  |  |  | $ | 4,457 |  |  |  | (2)% |  | 40%
30+ Delinq. % (a) |  | 0.57 |  | % |  | 0.65 |  | % |  | 0.74 |  | % |  | 0.81 |  | % |  | 0.86 |  | % |  |  |  |
NPL % |  | 1.22 |  |  |  | 1.12 |  |  |  | 1.76 |  |  |  | 1.70 |  |  |  | 1.83 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.52 |  | % |  | 0.59 |  | % |  | 0.94 |  | % |  | 1.04 |  | % |  | 1.11 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 380 |  |  |  | $ | 399 |  |  |  | $ | 403 |  |  |  | $ | 408 |  |  |  | $ | 409 |  |  |  | (5)% |  | (7)%
30+ Delinq. % (a) |  | 2.63 |  | % |  | 1.85 |  | % |  | 1.51 |  | % |  | 2.57 |  | % |  | 2.57 |  | % |  |  |  |
NPL % |  | 6.65 |  |  |  | 6.61 |  |  |  | 6.81 |  |  |  | 6.81 |  |  |  | 7.05 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.10 |  |  |  | 0.10 |  |  |  | NM |  |  |  | 0.35 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 4.07 |  | % |  | 3.90 |  | % |  | 3.90 |  | % |  | 4.02 |  | % |  | 3.88 |  | % |  |  |  |
Allowance / net charge-offs |  | 40.18 |  | x |  | 37.67 |  | x |  | NM |  |  |  | 11.52 |  | x |  | NM |  |  |  |  |  |
Credit Card and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 561 |  |  |  | $ | 620 |  |  |  | $ | 350 |  |  |  | $ | 354 |  |  |  | $ | 347 |  |  |  | (10)% |  | 62%
30+ Delinq. % (a) |  | 0.98 |  | % |  | 1.24 |  | % |  | 0.89 |  | % |  | 0.92 |  | % |  | 1.00 |  | % |  |  |  |
NPL % |  | 0.18 |  |  |  | 0.03 |  |  |  | 0.04 |  |  |  | 0.04 |  |  |  | 0.04 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 2.15 |  |  |  | 2.30 |  |  |  | 2.80 |  |  |  | 2.71 |  |  |  | 3.08 |  |  |  |  |  |
Allowance / loans % |  | 1.73 |  | % |  | 1.61 |  | % |  | 2.95 |  | % |  | 3.38 |  | % |  | 3.58 |  | % |  |  |  |
Allowance / net charge-offs |  | 0.76 |  | x |  | 0.99 |  | x |  | 1.04 |  | x |  | 1.24 |  | x |  | 1.16 |  | x |  |  |  |

NM - Not meaningful
* Amount is less than one percent.
(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(b) 3Q17 increase in delinquencies driven by 2 larger relationships, one of which is a purchased credit-impaired loan.
18

FHN ASSET QUALITY: REGIONAL BANKING
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
|  | 1Q18 |  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q17 |  | 1Q17
Total Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 26,020 |  |  |  | $ | 26,359 |  |  |  | $ | 18,788 |  |  |  | $ | 18,529 |  |  |  | $ | 17,537 |  |  |  | (1)% |  | 48%
30+ Delinq. % (a) |  | 0.21 |  | % |  | 0.26 |  | % |  | 0.28 |  | % |  | 0.13 |  | % |  | 0.24 |  | % |  |  |  |
NPL % |  | 0.22 |  |  |  | 0.20 |  |  |  | 0.22 |  |  |  | 0.23 |  |  |  | 0.28 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.06 |  |  |  | 0.22 |  |  |  | 0.12 |  |  |  | 0.07 |  |  |  | 0.03 |  |  |  |  |  |
Allowance / loans % |  | 0.60 |  | % |  | 0.58 |  | % |  | 0.83 |  | % |  | 0.83 |  | % |  | 0.89 |  | % |  |  |  |
Allowance / net charge-offs |  | 10.82 |  | x |  | 3.34 |  | x |  | 6.85 |  | x |  | 12.65 |  | x |  | 31.75 |  | x |  |  |  |
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 15,410 |  |  |  | $ | 15,639 |  |  |  | $ | 12,373 |  |  |  | $ | 12,178 |  |  |  | $ | 11,284 |  |  |  | (1)% |  | 37%
30+ Delinq. % (a) (b) |  | 0.16 |  | % |  | 0.20 |  | % |  | 0.28 |  | % |  | 0.03 |  | % |  | 0.18 |  | % |  |  |  |
NPL % |  | 0.16 |  |  |  | 0.18 |  |  |  | 0.13 |  |  |  | 0.17 |  |  |  | 0.24 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.02 |  |  |  | 0.29 |  |  |  | 0.10 |  |  |  | 0.04 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.64 |  | % |  | 0.62 |  | % |  | 0.78 |  | % |  | 0.75 |  | % |  | 0.81 |  | % |  |  |  |
Allowance / net charge-offs |  | 37.18 |  | x |  | 2.49 |  | x |  | 7.83 |  | x |  | 17.85 |  | x |  | NM |  |  |  |  |  |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 4,234 |  |  |  | $ | 4,215 |  |  |  | $ | 2,251 |  |  |  | $ | 2,212 |  |  |  | $ | 2,173 |  |  |  | * |  | 95%
30+ Delinq. % (a) |  | 0.08 |  | % |  | 0.11 |  | % |  | 0.02 |  | % |  | 0.01 |  | % |  | 0.03 |  | % |  |  |  |
NPL % |  | 0.02 |  |  |  | 0.03 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.11 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.69 |  | % |  | 0.67 |  | % |  | 1.32 |  | % |  | 1.38 |  | % |  | 1.42 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 5,707 |  |  |  | $ | 5,774 |  |  |  | $ | 3,714 |  |  |  | $ | 3,695 |  |  |  | $ | 3,655 |  |  |  | (1)% |  | 56%
30+ Delinq. % (a) |  | 0.38 |  | % |  | 0.40 |  | % |  | 0.38 |  | % |  | 0.46 |  | % |  | 0.48 |  | % |  |  |  |
NPL % |  | 0.53 |  |  |  | 0.39 |  |  |  | 0.61 |  |  |  | 0.54 |  |  |  | 0.55 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | 0.04 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.27 |  | % |  | 0.28 |  | % |  | 0.46 |  | % |  | 0.48 |  | % |  | 0.53 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | 11.04 |  | x |  | NM |  |  |  | NM |  |  |  |  |  |
Credit Card, Permanent Mortgage, and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 669 |  |  |  | $ | 731 |  |  |  | $ | 450 |  |  |  | $ | 444 |  |  |  | $ | 425 |  |  |  | (8)% |  | 57%
30+ Delinq. % (a) |  | 0.88 |  | % |  | 1.10 |  | % |  | 0.85 |  | % |  | 0.81 |  | % |  | 0.90 |  | % |  |  |  |
NPL % |  | 0.22 |  |  |  | 0.07 |  |  |  | 0.10 |  |  |  | 0.09 |  |  |  | 0.09 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 1.93 |  |  |  | 1.83 |  |  |  | 2.19 |  |  |  | 2.21 |  |  |  | 2.55 |  |  |  |  |  |
Allowance / loans % |  | 1.82 |  | % |  | 1.70 |  | % |  | 2.79 |  | % |  | 3.13 |  | % |  | 3.36 |  | % |  |  |  |
Allowance / net charge-offs |  | 0.90 |  | x |  | 1.25 |  | x |  | 1.27 |  | x |  | 1.44 |  | x |  | 1.33 |  | x |  |  |  |
ASSET QUALITY: CORPORATE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 49 |  |  |  | $ | 53 |  |  |  | $ | 58 |  |  |  | $ | 63 |  |  |  | $ | 67 |  |  |  | (8)% |  | (27)%
30+ Delinq. % (a) |  | 5.51 |  | % |  | 3.98 |  | % |  | 4.22 |  | % |  | 6.52 |  | % |  | 4.25 |  | % |  |  |  |
NPL % |  | 4.41 |  |  |  | 4.03 |  |  |  | 3.75 |  |  |  | 2.90 |  |  |  | 2.25 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |

NM - Not meaningful
* Amount is less than one percent.
(a) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(b) 3Q17 increase in delinquencies driven by 2 larger relationships, one of which is a purchased credit-impaired loan.
19

FHN ASSET QUALITY: NON-STRATEGIC
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1Q18 Changes vs.
|  | 1Q18 |  | 4Q17 |  | 3Q17 |  | 2Q17 |  | 1Q17 |  | 4Q17 |  | 1Q17
Total Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 1,181 |  |  |  | $ | 1,247 |  |  |  | $ | 1,320 |  |  |  | $ | 1,397 |  |  |  | $ | 1,486 |  |  |  | (5)% |  | (21)%
30+ Delinq. % (a) |  | 1.80 |  | % |  | 1.85 |  | % |  | 1.62 |  | % |  | 1.79 |  | % |  | 1.89 |  | % |  |  |  |
NPL % |  | 6.10 |  |  |  | 6.08 |  |  |  | 6.23 |  |  |  | 6.08 |  |  |  | 6.22 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 2.65 |  | % |  | 2.84 |  | % |  | 2.94 |  | % |  | 3.15 |  | % |  | 3.10 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 418 |  |  |  | $ | 418 |  |  |  | $ | 419 |  |  |  | $ | 420 |  |  |  | $ | 420 |  |  |  | * |  | *
30+ Delinq. % (a) |  | — |  | % |  | — |  | % |  | — |  | % |  | — |  | % |  | — |  | % |  |  |  |
NPL % |  | 0.72 |  |  |  | 0.73 |  |  |  | 0.74 |  |  |  | 0.95 |  |  |  | 0.97 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | — |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.30 |  | % |  | 0.33 |  | % |  | 0.32 |  | % |  | 0.34 |  | % |  | 0.35 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 540 |  |  |  | $ | 594 |  |  |  | $ | 656 |  |  |  | $ | 722 |  |  |  | $ | 802 |  |  |  | (9)% |  | (33)%
30+ Delinq. % (a) |  | 2.64 |  | % |  | 3.06 |  | % |  | 2.80 |  | % |  | 2.62 |  | % |  | 2.60 |  | % |  |  |  |
NPL % |  | 8.59 |  |  |  | 8.23 |  |  |  | 8.26 |  |  |  | 7.64 |  |  |  | 7.65 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 3.17 |  | % |  | 3.53 |  | % |  | 3.66 |  | % |  | 3.90 |  | % |  | 3.80 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 217 |  |  |  | $ | 229 |  |  |  | $ | 239 |  |  |  | $ | 249 |  |  |  | $ | 258 |  |  |  | (5)% |  | (16)%
30+ Delinq. % (a) |  | 3.16 |  | % |  | 2.12 |  | % |  | 1.20 |  | % |  | 2.38 |  | % |  | 2.78 |  | % |  |  |  |
NPL % |  | 10.43 |  |  |  | 10.40 |  |  |  | 10.39 |  |  |  | 10.30 |  |  |  | 10.45 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.17 |  |  |  | 0.18 |  |  |  | NM |  |  |  | 0.56 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 5.93 |  | % |  | 5.70 |  | % |  | 5.62 |  | % |  | 5.80 |  | % |  | 5.45 |  | % |  |  |  |
Allowance / net charge-offs |  | 33.55 |  | x |  | 31.54 |  | x |  | NM |  |  |  | 10.13 |  | x |  | NM |  |  |  |  |  |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 6 |  |  |  | $ | 6 |  |  |  | $ | 6 |  |  |  | $ | 6 |  |  |  | $ | 6 |  |  |  | * |  | *
30+ Delinq. % (a) |  | 1.61 |  | % |  | 0.95 |  | % |  | 1.44 |  | % |  | 1.95 |  | % |  | 1.84 |  | % |  |  |  |
NPL % |  | — |  |  |  | 1.89 |  |  |  | 1.92 |  |  |  | 1.93 |  |  |  | 1.90 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | 1.90 |  |  |  | 1.14 |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 1.28 |  | % |  | 1.36 |  | % |  | 0.69 |  | % |  | 0.35 |  | % |  | 0.08 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | 0.71 |  | x |  | 0.60 |  | x |  | 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, Unaudited

(Dollars and shares in thousands, except per share data) | 1Q18 |  |  | 4Q17 |  |  | 3Q17 |  |  | 2Q17 |  |  | 1Q17 |  |
Tangible Common Equity (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |
(A) Total equity (GAAP) | $ | 4,571,918 |  |  | $ | 4,580,488 |  |  | $ | 2,883,551 |  |  | $ | 2,826,888 |  |  | $ | 2,740,460 |  |
Less: Noncontrolling interest (a) | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |
Less: Preferred stock (a) | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |
(B) Total common equity | $ | 4,180,863 |  |  | $ | 4,189,433 |  |  | $ | 2,492,496 |  |  | $ | 2,435,833 |  |  | $ | 2,349,405 |  |
Less: Intangible assets (GAAP) (b) | 1,572,916 |  |  | 1,571,242 |  |  | 279,492 |  |  | 281,456 |  |  | 211,156 |  |
(C) Tangible common equity (Non-GAAP) | $ | 2,607,947 |  |  | $ | 2,618,191 |  |  | $ | 2,213,004 |  |  | $ | 2,154,377 |  |  | $ | 2,138,249 |  |
Tangible Assets (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(D) Total assets (GAAP) | $ | 40,462,585 |  |  | $ | 41,423,388 |  |  | $ | 29,622,636 |  |  | $ | 29,369,956 |  |  | $ | 29,618,600 |  |
Less: Intangible assets (GAAP) (b) | 1,572,916 |  |  | 1,571,242 |  |  | 279,492 |  |  | 281,456 |  |  | 211,156 |  |
(E) Tangible assets (Non-GAAP) | $ | 38,889,669 |  |  | $ | 39,852,146 |  |  | $ | 29,343,144 |  |  | $ | 29,088,500 |  |  | $ | 29,407,444 |  |
Average Tangible Common Equity (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(F) Average total equity (GAAP) | $ | 4,573,706 |  |  | $ | 3,506,165 |  |  | $ | 2,866,757 |  |  | $ | 2,778,169 |  |  | $ | 2,722,668 |  |
Less: Average noncontrolling interest (a) | 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 |  |
(G) Total average common equity | $ | 4,182,651 |  |  | $ | 3,115,110 |  |  | $ | 2,475,702 |  |  | $ | 2,387,114 |  |  | $ | 2,331,613 |  |
Less: Average intangible assets (GAAP) (b) | 1,568,029 |  |  | 726,958 |  |  | 280,575 |  |  | 281,326 |  |  | 211,757 |  |
(H) Average tangible common equity (Non-GAAP) | $ | 2,614,622 |  |  | $ | 2,388,152 |  |  | $ | 2,195,127 |  |  | $ | 2,105,788 |  |  | $ | 2,119,856 |  |
Annualized Net Income/(loss) Available to Common Shareholders |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(I) Net income /(loss) available to common shareholders (annualized) (GAAP) | $ | 367,531 |  |  | $ | (209,641 | ) |  | $ | 267,148 |  |  | $ | 364,206 |  |  | $ | 219,073 |  |
Period-end Shares Outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(J) Period-end shares outstanding | 327,194 |  |  | 326,736 |  |  | 234,231 |  |  | 234,135 |  |  | 233,883 |  |
Ratios |  |  |  |  |  |  |  |  |  |
(I)/(G) Return on average common equity (“ROE”) (GAAP) | 8.79 |  | % | (6.73 | ) | % | 10.79 |  | % | 15.26 |  | % | 9.40 |  | %
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP) | 14.06 |  | % | (8.78 | ) | % | 12.17 |  | % | 17.30 |  | % | 10.33 |  | %
(A)/(D) Total equity to total assets (GAAP) | 11.30 |  | % | 11.06 |  | % | 9.73 |  | % | 9.63 |  | % | 9.25 |  | %
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP) | 6.71 |  | % | 6.57 |  | % | 7.54 |  | % | 7.41 |  | % | 7.27 |  | %
(B)/(J) Book value per common share (GAAP) | $ | 12.78 |  |  | $ | 12.82 |  |  | $ | 10.64 |  |  | $ | 10.40 |  |  | $ | 10.05 |  |
(C)/(J) Tangible book value per common share (Non-GAAP) | $ | 7.97 |  |  | $ | 8.01 |  |  | $ | 9.45 |  |  | $ | 9.20 |  |  | $ | 9.14 |  |

(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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