EX-99.1 2 fhn3q19financialsupplement.htm EXHIBIT 99.1 FINANCIAL SUPPLEMENT
1

THIRD QUARTER 2019
FINANCIAL SUPPLEMENT
If you need further information, please contact:
Aarti Bowman, Investor Relations
901-523-4017
aagoorha@firsthorizon.com

FHN TABLE OF CONTENTS

| Page
First Horizon National Corporation Segment Structure | 3
Performance Highlights | 4
Consolidated Results |
Income Statement |
Income Statement | 6
Other Income and Other Expense | 7
Acquisition, Restructuring, and Rebranding Expense | 8
Balance Sheet |
Period End Balance Sheet | 9
Average Balance Sheet | 10
Net Interest Income | 11
Average Balance Sheet: Yields and Rates | 12
Capital Highlights | 13
Business Segment Detail |
Segment Highlights | 14
Regional Banking | 15
Fixed Income and Corporate | 16
Non-Strategic | 17
Asset Quality |
Asset Quality: Consolidated | 18
Asset Quality: Regional Banking and Corporate | 20
Asset Quality: Non-Strategic | 21
Non-GAAP to GAAP Reconciliation | 22
Glossary of Terms | 23

Other Information
This financial supplement contains forward-looking statements involving significant risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking information. Those factors include general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve, competition, customer and investor responses to these conditions, ability to execute business plans, geopolitical developments, recent and future legislative and regulatory developments, natural disasters, and items mentioned in this financial supplement and in First Horizon National Corporation’s (“FHN”) most recent earnings release, as well as critical accounting estimates and other factors described in FHN’s recent filings with the SEC. FHN disclaims any obligation to update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements to reflect future events or developments.
Use of Non-GAAP Measures and Regulatory Measures that are not GAAP
Certain measures are included in this financial supplement that are “non-GAAP,” meaning (under U.S. financial reporting rules) they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.
Presentation of regulatory measures, some of which follow regulatory definitions rather than GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN. Such measures are used by the various banking regulators in reviewing the performance, stability, and capital adequacy of financial institutions they regulate. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this financial supplement include: common equity tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; risk weighted assets (“RWA”), which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios; and pre-provision net revenue (“PPNR”), calculated by adding the provision/(provision credit) for loan losses to income before income taxes, excluding securities gains/(losses).
The non-GAAP measures presented in this financial supplement are return on average tangible common equity (“ROTCE”), tangible common equity (“TCE”) to tangible assets (“TA”), and tangible book value ("TBV") per common share.
Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items on page 22 of this financial supplement.
2

FIRST HORIZON NATIONAL CORPORATION SEGMENT STRUCTURE |

3

FHN PERFORMANCE HIGHLIGHTS
Summary of Third Quarter 2019 Notable Items
Segment |  | Item |  | Income Statement |  | Amount Favorable/ (Unfavorable) |  | Comments
Corporate |  | Acquisition expenses |  | Noninterest expense: various |  | $(9.0) million |  | Pre-tax acquisition-related expenses primarily associated with the Capital Bank Financial Corp. ("CBF") acquisition
Corporate |  | Restructuring, repositioning, and efficiency initiatives |  | Noninterest expense: various |  | $(7.8) million |  | Pre-tax expense associated with professional fees and severance-related costs associated with efficiency initiatives
Fixed Income |  | Legal matters |  | Noninterest expense: various |  | $(7.5) million |  | Pre-tax net impact related to the resolution of legal matters
Corporate |  | Visa derivative valuation adjustments |  | Noninterest expense: other |  | $(4.0) million |  | Pre-tax negative valuation adjustments associated with derivatives related to prior sales of Visa Class B shares
Corporate |  | Rebranding expenses |  | Noninterest expense: various |  | $(3.1) million |  | Pre-tax expense associated with technology-related expenses, professional fees, and marketing and advertising expenses
Third Quarter 2019 vs. Second Quarter 2019

Consolidated |  |  |  |  |  |  | l Diluted EPS of $.35 in 3Q19 and 2Q19 l Total revenue up 2% l Fee income up 9% due to higher fixed income revenue, fees from derivative sales, and deposit fees l NII down from the negative impact of interest rates (including LIBOR and Prime) and lower loan accretion, somewhat offset by higher commercial loan balances l NI M of 3.21% in 3Q19 compared to 3.34% in 2Q19; decrease primarily due to a decline in LIBOR and lower loan accretion l Loan loss provision of $15 million in 3Q19, up from $13 million in 2Q19 l Expenses up 2% due to a net increase in litigation expenses and negative Visa derivative valuation adjustments, somewhat offset by lower restructuring-, rebranding- and personnel-related expenses l Average loan growth of 5%; Average deposit growth of 1%
(Thousands, except per share data) | 3Q19 |  |  | 2Q19 |  |  | Change |
Income Statement |  |  |  |  |  |  |
Net interest income | $ | 300,676 |  |  | $ | 303,610 |  |  | (1 | ) | % |
Noninterest income | 171,735 |  |  | 157,993 |  |  | 9 |  | % |
Total revenues | 472,411 |  |  | 461,603 |  |  | 2 |  | % |
Provision for loan losses | 15,000 |  |  | 13,000 |  |  | 15 |  | % |
Noninterest expense | 307,672 |  |  | 300,394 |  |  | 2 |  | % |
Income before income taxes | 149,739 |  |  | 148,209 |  |  | 1 |  | % |
Provision for income taxes | 35,796 |  |  | 34,467 |  |  | 4 |  | % |
Net income/(loss) | $ | 113,943 |  |  | $ | 113,742 |  |  | * |  |  |
Diluted EPS | $ | 0.35 |  |  | $ | 0.35 |  |  | * |  |  |
Balance Sheet (millions) |  |  |  |  |  |  |
Average Loans | $ | 30,016 |  |  | $ | 28,672 |  |  | 5 |  | % |
Average Deposits | 32,371 |  |  | 31,964 |  |  | 1 |  | % |
* Amount is less than one percent.

Regional Banking |  |  |  |  |  |  | l Strong loan growth l Loan growth due to increases in C&I and specialty areas, with particular strength in loans to mortgage companies l NII up from commercial loan growth, and more days in 3Q19, somewhat offset by lower accretion l Fee income up 5% due to fees from derivative sales and deposit fees l Provision expense primarily driven by a charge-off associated with a single unreserved commercial credit, commercial loan growth, and modest grade migration l Net charge-offs were $17.1 million in 3Q19, up from $7.8 million l Expense flat as a decrease in personnel expenses was offset by higher professional fee s related to strategic initiatives and development costs
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | Change |
Net interest income | $ | 302,370 |  |  | $ | 297,339 |  |  | 2 |  | % |
Noninterest income | 85,776 |  |  | 81,475 |  |  | 5 |  | % |
Total revenues | 388,146 |  |  | 378,814 |  |  | 2 |  | % |
Provision for loan losses | 20,472 |  |  | 17,775 |  |  | 15 |  | % |
Noninterest expense | 193,211 |  |  | 193,268 |  |  | * |  |  |
Income before income taxes | $ | 174,463 |  |  | $ | 167,771 |  |  | 4 |  | % |
PPNR (a) | 194,935 |  |  | 185,546 |  |  | 5 |  | % |
Balance Sheet (millions) |  |  |  |  |  |  |
Average loans | $ | 28,958 |  |  | $ | 27,533 |  |  | 5 |  | % |
Average deposits | 30,044 |  |  | 29,954 |  |  | * |  |  |
* Amount is less than one percent.
(a) Pre-provision net revenue is not a GAAP number but is used in regulatory stress test reporting. The presentation of PPNR in this Financial Supplement follows the regulatory definition.

Fixed Income |  |  |  |  |  |  | l Decline in interest rates, rate outlook, and market volatility favorably impacted 3Q19 activity l 3Q19 ADR of $994 thousand, compared to ADR of $866 thousand in 2Q19, up 15% with growth across multiple trading desks l Other product revenue up $3.1 million from derivative and loan sales l Expense increase largely driven by the net impact of the resolution of legal matters, coupled with higher variable compensation associated with increased revenues
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | Change |
Net interest income | $ | 5,309 |  |  | $ | 6,171 |  |  | (14 | ) | % |
Noninterest income | 77,809 |  |  | 65,622 |  |  | 19 |  | % |
Total revenues | 83,118 |  |  | 71,793 |  |  | 16 |  | % |
Noninterest expense | 67,787 |  |  | 55,770 |  |  | 22 |  | % |
Income before income taxes | $ | 15,331 |  |  | $ | 16,023 |  |  | (4 | ) | % |

4

FHN PERFORMANCE HIGHLIGHTS (continued)
Third Quarter 2019 vs. Second Quarter 2019 (continued)

Corporate |  |  |  |  |  |  | l NII negatively impacted by lower average balances of securities and cash and declining rates l Expense decrease driven by lower restructuring costs associated with efficiency initiatives and rebranding-related expenses, somewhat offset by $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | Change |
Net interest income | $ | (13,225 | ) |  | $ | (7,034 | ) |  | (88 | ) | % |
Noninterest income | 7,359 |  |  | 9,400 |  |  | (22 | ) | % |
Total revenues | (5,866 | ) |  | 2,366 |  |  | NM |  |  |
Noninterest expense | 41,993 |  |  | 55,500 |  |  | (24 | ) | % |
Income before income taxes | $ | (47,859 | ) |  | $ | (53,134 | ) |  | 10 |  | % |
NM - Not meaningful |  |  |  |  |  |  |  |

Non-Strategic |  |  |  |  |  |  | l Non-Strategic results reflect continuing wind-down of the loan portfolio l Fee income in 2Q19 includes a $1.1 million gain on the sale and payoff of TRUPS loans l 2Q19 includes an $8.3 million favorable expense reversal related to the resolution of legal matters
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | Change |
Net interest income | $ | 6,222 |  |  | $ | 7,134 |  |  | (13 | ) | % |
Noninterest income | 791 |  |  | 1,496 |  |  | (47 | ) | % |
Total revenues | 7,013 |  |  | 8,630 |  |  | (19 | ) | % |
Provision for loan losses | (5,472 | ) |  | (4,775 | ) |  | (15 | ) | % |
Noninterest expense | 4,681 |  |  | (4,144 | ) |  | NM |  |  |
Income before income taxes | $ | 7,804 |  |  | $ | 17,549 |  |  | (56 | ) | % |
Balance Sheet |  |  |  |  |  |  |
Average loans | $ | 935 |  |  | $ | 1,011 |  |  | (8 | ) | % |
NM - Not meaningful |  |  |  |  |  |  |  |

Asset Quality |  |  |  |  |  |  |  | l Increase in reserves primarily driven by loan growth within the commercial portfolio and modest grade migration - some of which is associated with two credits that moved to individually impaired; these increases were partially offset by declining balances in the non-strategic portfolio l Increase in net charge-offs driven by two commercial credits, one of which was reserved in 2Q19 l Nonperforming loans decrea sed $32.1 million, primari ly driven by one mortgage warehouse lending relationship that converted to the underlying collateral l Increase in 30+ delinquencies primarily driven by one commercial credit
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | Change |
Allowance for loan losses | $193,149 |  | $192,749 |  | * |  |  |
Allowance / loans % | 0.62 | % |  | 0.65 | % |  |  |  |  |
Net Charge-offs | $14,600 |  | $5,162 |  | NM |  |  |
Net charge-offs % | 0.19 | % |  | 0.07 | % |  |  |  |  |
Nonperforming Loans (a) | $172,495 |  | $204,586 |  | (16 | ) | % |
NPL % | 0.55 | % |  | 0.69 | % |  |  |  |  |
30+ delinquencies | $70,675 |  | $58,861 |  | 20 |  | % |
30+ delinquencies % | 0.23 | % |  | 0.20 | % |  |  |  |  |
NM - Not meaningful |  |  |  |  |  |  |  |
* Amount is less than one percent. |  |  |  |  |  |  |  |
(a) Excludes loans held-for-sale. |  |  |  |  |  |  |  |

Capital and Liquidity |  |  |  |  |  |  |  | l Declared quarterly dividend of $.14 in 3Q19; dividend p ayout of 40% l Repurchased 1.8 million shares (weighted average price - $15.73) in 3Q19 compared to 3.5 million shares (weighted average price - $14.30) in 2Q19 l $270.7 million remaining authorization under the stock purchase authorization fi rst announced in January 2018, currently scheduled to expire January 31, 2021 l 3Q19 decrease in risk-based capital ratios largely driven by an increase in risk-weighted assets driven by period-end commercial loan growth
(millions) | 3Q19 |  |  | 2Q19 |  |  | Change |
Common dividends declared (a) | $ | 43.5 |  |  | $ | 43.7 |  |  | * |  |  |
Preferred dividends declared | $ | 1.6 |  |  | $ | 1.6 |  |  | * |  |  |
Share repurchases | $ | 28.2 |  |  | $ | 50.2 |  |  | (44 | ) | % |
Capital Ratios (b) |  |  |  |  |  |  |
Common Equity Tier 1 | 8.99 | % |  | 9.25 | % |  |  |  |  |
Tier 1 | 9.95 | % |  | 10.24 | % |  |  |  |  |
Total Capital | 10.99 | % |  | 11.34 | % |  |  |  |  |
Leverage | 9.05 | % |  | 9.04 | % |  |  |  |  |
* Amount is less than one percent. |  |  |  |  |  |  |  |
(a) 3Q19 common dividends paid October 1, 2019; 2Q19 common dividends paid July 1, 2019.
(b) Regulatory capital ratios calculated under the Basel III risk-based capital rules as phased-in; current quarter is an estimate.

5

FHN CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Dollars in thousands, except per share data) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Interest income | $ | 407,494 |  |  | $ | 412,089 |  |  | $ | 400,615 |  |  | $ | 401,186 |  |  | $ | 393,669 |  |  | (1 | ) | % | 4 |  | %
Less: interest expense | 106,818 |  |  | 108,479 |  |  | 106,107 |  |  | 98,674 |  |  | 87,969 |  |  | (2 | ) | % | 21 |  | %
Net interest income | 300,676 |  |  | 303,610 |  |  | 294,508 |  |  | 302,512 |  |  | 305,700 |  |  | (1 | ) | % | (2 | ) | %
Provision/(provision credit) for loan losses | 15,000 |  |  | 13,000 |  |  | 9,000 |  |  | 6,000 |  |  | 2,000 |  |  | 15 |  | % | NM |  |
Net interest income after provision for loan losses | 285,676 |  |  | 290,610 |  |  | 285,508 |  |  | 296,512 |  |  | 303,700 |  |  | (2 | ) | % | (6 | ) | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income (a) | 77,645 |  |  | 66,414 |  |  | 53,749 |  |  | 39,866 |  |  | 44,813 |  |  | 17 |  | % | 73 |  | %
Deposit transactions and cash management (b) | 34,379 |  |  | 32,374 |  |  | 31,621 |  |  | 25,422 |  |  | 35,792 |  |  | 6 |  | % | (4 | ) | %
Brokerage, management fees and commissions | 14,157 |  |  | 14,120 |  |  | 12,633 |  |  | 13,380 |  |  | 14,200 |  |  | * |  |  | * |  |
Trust services and investment management | 7,163 |  |  | 7,888 |  |  | 7,026 |  |  | 6,959 |  |  | 7,438 |  |  | (9 | ) | % | (4 | ) | %
Bankcard income | 7,017 |  |  | 6,355 |  |  | 6,952 |  |  | 7,570 |  |  | 7,744 |  |  | 10 |  | % | (9 | ) | %
Bank-owned life insurance | 4,427 |  |  | 5,126 |  |  | 4,402 |  |  | 4,852 |  |  | 4,337 |  |  | (14 | ) | % | 2 |  | %
Securities gains/(losses), net (c) | 97 |  |  | 49 |  |  | 31 |  |  | (28 | ) |  | 212,859 |  |  | 98 |  | % | NM |  |
Other (d) | 26,850 |  |  | 25,667 |  |  | 24,631 |  |  | 12,253 |  |  | 21,789 |  |  | 5 |  | % | 23 |  | %
Total noninterest income | 171,735 |  |  | 157,993 |  |  | 141,045 |  |  | 110,274 |  |  | 348,972 |  |  | 9 |  | % | (51 | ) | %
Adjusted gross income after provision for loan losses | 457,411 |  |  | 448,603 |  |  | 426,553 |  |  | 406,786 |  |  | 652,672 |  |  | 2 |  | % | (30 | ) | %
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation, incentives, and benefits (e) | 167,022 |  |  | 171,643 |  |  | 177,925 |  |  | 156,240 |  |  | 164,839 |  |  | (3 | ) | % | 1 |  | %
Repurchase and foreclosure provision (f) | (22 | ) |  | (530 | ) |  | (455 | ) |  | (153 | ) |  | (562 | ) |  | 96 |  | % | 96 |  | %
Legal fees (g) | 4,854 |  |  | 6,486 |  |  | 2,831 |  |  | 3,479 |  |  | 2,541 |  |  | (25 | ) | % | 91 |  | %
Professional fees (g) | 14,910 |  |  | 11,291 |  |  | 12,299 |  |  | 8,842 |  |  | 9,270 |  |  | 32 |  | % | 61 |  | %
Occupancy (g) | 18,887 |  |  | 20,719 |  |  | 20,693 |  |  | 22,053 |  |  | 20,002 |  |  | (9 | ) | % | (6 | ) | %
Computer software | 15,191 |  |  | 15,001 |  |  | 15,139 |  |  | 14,656 |  |  | 15,693 |  |  | 1 |  | % | (3 | ) | %
Contract employment and outsourcing | 3,256 |  |  | 3,078 |  |  | 3,371 |  |  | 4,248 |  |  | 4,314 |  |  | 6 |  | % | (25 | ) | %
Operations services | 11,634 |  |  | 11,713 |  |  | 11,488 |  |  | 12,945 |  |  | 13,121 |  |  | (1 | ) | % | (11 | ) | %
Equipment rentals, depreciation, and maintenance | 8,197 |  |  | 8,375 |  |  | 8,829 |  |  | 8,983 |  |  | 9,423 |  |  | (2 | ) | % | (13 | ) | %
FDIC premium expense (h) | 5,564 |  |  | 4,247 |  |  | 4,273 |  |  | 5,200 |  |  | 7,850 |  |  | 31 |  | % | (29 | ) | %
Advertising and public relations | 6,646 |  |  | 5,574 |  |  | 7,242 |  |  | 7,718 |  |  | 8,365 |  |  | 19 |  | % | (21 | ) | %
Communications and courier | 5,650 |  |  | 7,380 |  |  | 6,453 |  |  | 7,256 |  |  | 7,014 |  |  | (23 | ) | % | (19 | ) | %
Amortization of intangible assets | 6,206 |  |  | 6,206 |  |  | 6,216 |  |  | 6,461 |  |  | 6,460 |  |  | * |  |  | (4 | ) | %
Other (d) | 39,677 |  |  | 29,211 |  |  | 19,786 |  |  | 24,004 |  |  | 25,701 |  |  | 36 |  | % | 54 |  | %
Total noninterest expense | 307,672 |  |  | 300,394 |  |  | 296,090 |  |  | 281,932 |  |  | 294,031 |  |  | 2 |  | % | 5 |  | %
Income before income taxes | 149,739 |  |  | 148,209 |  |  | 130,463 |  |  | 124,854 |  |  | 358,641 |  |  | 1 |  | % | (58 | ) | %
Provision for income taxes (i) | 35,796 |  |  | 34,467 |  |  | 27,058 |  |  | 24,049 |  |  | 83,925 |  |  | 4 |  | % | (57 | ) | %
Net income/(loss) | 113,943 |  |  | 113,742 |  |  | 103,405 |  |  | 100,805 |  |  | 274,716 |  |  | * |  |  | (59 | ) | %
Net income attributable to noncontrolling interest | 2,883 |  |  | 2,852 |  |  | 2,820 |  |  | 2,910 |  |  | 2,883 |  |  | 1 |  | % | * |  |
Net income/(loss) attributable to controlling interest | 111,060 |  |  | 110,890 |  |  | 100,585 |  |  | 97,895 |  |  | 271,833 |  |  | * |  |  | (59 | ) | %
Preferred stock dividends | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | 1,550 |  |  | * |  |  | * |  |
Net income/(loss) available to common shareholders | $ | 109,510 |  |  | $ | 109,340 |  |  | $ | 99,035 |  |  | $ | 96,345 |  |  | $ | 270,283 |  |  | * |  |  | (59 | ) | %
Common Stock Data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
EPS (c) | $ | 0.35 |  |  | $ | 0.35 |  |  | $ | 0.31 |  |  | $ | 0.30 |  |  | $ | 0.83 |  |  | * |  |  | (58 | ) | %
Basic shares (thousands) | 311,888 |  |  | 314,063 |  |  | 317,435 |  |  | 321,505 |  |  | 324,406 |  |  | (1 | ) | % | (4 | ) | %
Diluted EPS (c) | $ | 0.35 |  |  | $ | 0.35 |  |  | $ | 0.31 |  |  | $ | 0.30 |  |  | $ | 0.83 |  |  | * |  |  | (58 | ) | %
Diluted shares (thousands) | 313,805 |  |  | 315,786 |  |  | 319,581 |  |  | 323,885 |  |  | 327,252 |  |  | (1 | ) | % | (4 | ) | %
Key Ratios & Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (annualized) (c) (j) | 1.08 | % |  | 1.11 | % |  | 1.03 | % |  | 0.99 | % |  | 2.72 | % |  |  |  |  |  |  |
Return on average common equity (“ROCE”) (annualized) (c) (j) | 9.50 | % |  | 9.79 | % |  | 9.09 | % |  | 8.81 | % |  | 25.41 | % |  |  |  |  |  |  |
Return on average tangible common equity (“ROTCE”) (annualized) (c) (j) (k) | 14.49 | % |  | 15.12 | % |  | 14.17 | % |  | 13.80 | % |  | 40.51 | % |  |  |  |  |  |  |
Fee income to total revenue (j) | 36.34 | % |  | 34.22 | % |  | 32.38 | % |  | 26.72 | % |  | 30.81 | % |  |  |  |  |  |  |
Efficiency ratio (j) | 65.14 | % |  | 65.08 | % |  | 67.99 | % |  | 68.30 | % |  | 66.55 | % |  |  |  |  |  |  |
Average full time equivalent employees | 5,116 |  |  | 5,287 |  |  | 5,524 |  |  | 5,563 |  |  | 5,623 |  |  |  |  |  |  |  |

NM - Not meaningful
* Am ount is less than one percent.

(a) | 2Q19 and 3Q18 include $1.1 million and $3.8 million, respectively, of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.

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

(c) | 3Q18 includes a pre-tax gain of $212.9 million from the sale of Visa Class B Shares which impacts certain performance measures in 3Q18.

(d) | Refer to the Other Income and Other Expense table on page 7 for additional information.

(e) | 3Q19, 2Q19 and 1Q19 include severance-related costs associated with efficiency initiatives, refer to the Restructuring expense table on page 8 for additional information; 1Q19 and 4Q18 include $6.2 million and $(7.1) million, respectively, of deferred compensation expense.

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

(g) | Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 8 for additional information about variability in quarterly balances.

(h) 4Q18 decrease due to the end of the FDIC assessment surcharge.

(i) | 3Q18 reflects the tax effect on the gain on the sale of Visa Class B Shares.

(j) | See Glossary of Terms for definitions of Key Ratios.

(k) | This non-GAAP measure is reconciled to ROCE (GAAP) in the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement.

6

FHN OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Thousands) |  | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Other Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ATM and interchange fees |  | $ | 4,507 |  |  | $ | 4,262 |  |  | $ | 3,241 |  |  | $ | 3,411 |  |  | $ | 3,263 |  |  | 6 |  | % | 38 |  | %
Dividend income |  | 1,556 |  |  | 1,809 |  |  | 2,313 |  |  | 2,425 |  |  | 2,757 |  |  | (14 | ) | % | (44 | ) | %
Electronic banking fees |  | 1,288 |  |  | 1,267 |  |  | 1,271 |  |  | 1,393 |  |  | 1,309 |  |  | 2 |  | % | (2 | ) | %
Letter of credit fees |  | 1,400 |  |  | 1,253 |  |  | 1,368 |  |  | 1,447 |  |  | 1,307 |  |  | 12 |  | % | 7 |  | %
Mortgage banking |  | 2,019 |  |  | 2,572 |  |  | 1,886 |  |  | 3,077 |  |  | 2,533 |  |  | (22 | ) | % | (20 | ) | %
Deferred compensation (a) |  | 472 |  |  | 1,938 |  |  | 5,474 |  |  | (6,124 | ) |  | 1,458 |  |  | (76 | ) | % | (68 | ) | %
Insurance commissions |  | 577 |  |  | 566 |  |  | 624 |  |  | 467 |  |  | 396 |  |  | 2 |  | % | 46 |  | %
Other service charges |  | 5,738 |  |  | 5,624 |  |  | 3,869 |  |  | 3,513 |  |  | 3,758 |  |  | 2 |  | % | 53 |  | %
Gain/(loss) on extinguishment of debt |  | (6 | ) |  | — |  |  | (1 | ) |  | (14 | ) |  | (1 | ) |  | NM |  |  | NM |  |
Other (b) |  | 9,299 |  |  | 6,376 |  |  | 4,586 |  |  | 2,658 |  |  | 5,009 |  |  | 46 |  | % | 86 |  | %
Total |  | $ | 26,850 |  |  | $ | 25,667 |  |  | $ | 24,631 |  |  | $ | 12,253 |  |  | $ | 21,789 |  |  | 5 |  | % | 23 |  | %
Other Expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Litigation and regulatory matters |  | $ | 11,534 |  |  | $ | (8,230 | ) |  | $ | 13 |  |  | $ | 35 |  |  | $ | (1,541 | ) |  | NM |  |  | NM |  |
Tax credit investments |  | 407 |  |  | 267 |  |  | 675 |  |  | 1,126 |  |  | 1,370 |  |  | 52 |  | % | (70 | ) | %
Travel and entertainment |  | 2,849 |  |  | 2,906 |  |  | 2,712 |  |  | 4,340 |  |  | 3,988 |  |  | (2 | ) | % | (29 | ) | %
Employee training and dues |  | 1,003 |  |  | 1,251 |  |  | 1,457 |  |  | 1,908 |  |  | 1,682 |  |  | (20 | ) | % | (40 | ) | %
Customer relations (c) |  | 3,165 |  |  | 1,540 |  |  | 1,599 |  |  | 1,834 |  |  | 1,328 |  |  | NM |  |  | NM |  |
Miscellaneous loan costs |  | 1,017 |  |  | 857 |  |  | 1,027 |  |  | 1,012 |  |  | 543 |  |  | 19 |  | % | 87 |  | %
Supplies |  | 1,668 |  |  | 1,342 |  |  | 1,804 |  |  | 1,459 |  |  | 1,635 |  |  | 24 |  | % | 2 |  | %
OREO |  | 342 |  |  | 25 |  |  | (366 | ) |  | 456 |  |  | 1,256 |  |  | NM |  |  | (73 | ) | %
Other insurance and taxes |  | 2,475 |  |  | 2,495 |  |  | 2,694 |  |  | 1,506 |  |  | 2,761 |  |  | (1 | ) | % | (10 | ) | %
Non-service components of net periodic pension and post retirement cost |  | 986 |  |  | 559 |  |  | 432 |  |  | 1,632 |  |  | 1,585 |  |  | 76 |  | % | (38 | ) | %
Other (d) |  | 14,231 |  |  | 26,199 |  |  | 7,739 |  |  | 8,696 |  |  | 11,094 |  |  | (46 | ) | % | 28 |  | %
Total |  | $ | 39,677 |  |  | $ | 29,211 |  |  | $ | 19,786 |  |  | $ | 24,004 |  |  | $ | 25,701 |  |  | 36 |  | % | 54 |  | %

NM - Not meaningful

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

(b) | 3Q19 and 2Q19 increase due in large part to higher fees from derivative sales in the Regional Banking segment; 3Q19 and 3Q18 include $1.0 million and $.8 million, respectively, of gains on the sales of buildings; 4Q18 includes a $1.8 million negative valuation adjustment on HFS consumer loans included in the Non-Strategic segment.

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

(d) | Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 8 for additional information about variability in quarterly balances; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.

7

ACQUISITION EXPENSE
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
(Thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Legal and professional fees (a) | $ | 3,507 |  |  | $ | 4,478 |  |  | $ | 1,867 |  |  | $ | 3,122 |  |  | $ | 4,593 |  |  | (22 | ) | % | (24 | ) | %
Employee compensation, incentives, and benefits (b) | 1,473 |  |  | 1,472 |  |  | 1,517 |  |  | 2,543 |  |  | 3,112 |  |  | * |  |  | (53 | ) | %
Occupancy (c) | (76 | ) |  | 1,505 |  |  | 118 |  |  | 2,885 |  |  | 115 |  |  | NM |  |  | NM |  |
Contract employment and outsourcing (d) | 223 |  |  | 17 |  |  | — |  |  | (20 | ) |  | 599 |  |  | NM |  |  | (63 | ) | %
Miscellaneous expense (e) | 1,022 |  |  | 79 |  |  | 1,069 |  |  | 1,130 |  |  | 1,381 |  |  | NM |  |  | (26 | ) | %
All other expense (f) | 2,840 |  |  | 1,096 |  |  | 1,089 |  |  | 2,040 |  |  | 1,549 |  |  | NM |  |  | 83 |  | %
Total acquisition expense | $ | 8,989 |  |  | $ | 8,647 |  |  | $ | 5,660 |  |  | $ | 11,700 |  |  | $ | 11,349 |  |  | 4 |  | % | (21 | ) | %

NM - Not meaningful
* Am ount is less than one percent.

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

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

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

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

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

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

RESTRUCTURING EXPENSE
Quarterly, Unaudited

|  |  |  |  |  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 2Q19
(Thousands) |  |  |  |  |  |  |  |  |
Legal and professional fees | $ | 6,488 |  |  | $ | 4,242 |  |  | $ | 4,295 |  |  | 53 |  | %
Employee compensation, incentives, and benefits | 1,182 |  |  | 2,557 |  |  | 6,505 |  |  | (54 | ) | %
Occupancy | (128 | ) |  | 72 |  |  | 817 |  |  | NM |  |
All other expense (a) | 300 |  |  | 11,797 |  |  | 535 |  |  | (97 | ) | %
Total restructuring expense | $ | 7,842 |  |  | $ | 18,668 |  |  | $ | 12,152 |  |  | (58 | ) | %

NM - Not meaningful

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

REBRANDING EXPENSE
Quarterly, Unaudited

|  |  |  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 2Q19
(Thousands) |  |  |  |  |  |
Legal and professional fees | $ | 879 |  |  | $ | 882 |  |  | * |  |
Advertising and public relations | 663 |  |  | 423 |  |  | 57 |  | %
Supplies | 105 |  |  | 325 |  |  | (68 | ) | %
Miscellaneous expense | 145 |  |  | 38 |  |  | NM |  |
All other expense (a) | 1,322 |  |  | 7,406 |  |  | (82 | ) | %
Total rebranding expense | $ | 3,114 |  |  | $ | 9,074 |  |  | $ | (66 | ) | %

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

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

8

FHN CONSOLIDATED PERIOD-END BALANCE SHEET
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities | $ | 4,425,845 |  |  | $ | 4,425,609 |  |  | $ | 4,626,322 |  |  | $ | 4,636,470 |  |  | $ | 4,618,383 |  |  | * |  |  | (4 | ) | %
Loans held-for-sale (a) | 554,843 |  |  | 447,106 |  |  | 594,662 |  |  | 679,149 |  |  | 725,651 |  |  | 24 |  | % | (24 | ) | %
Loans, net of unearned income | 31,260,833 |  |  | 29,712,810 |  |  | 27,990,048 |  |  | 27,535,532 |  |  | 27,350,214 |  |  | 5 |  | % | 14 |  | %
Federal funds sold | 48,747 |  |  | 50,705 |  |  | 167,602 |  |  | 237,591 |  |  | 113,722 |  |  | (4 | ) | % | (57 | ) | %
Securities purchased under agreements to resell | 697,214 |  |  | 602,919 |  |  | 474,679 |  |  | 386,443 |  |  | 687,437 |  |  | 16 |  | % | 1 |  | %
Interest-bearing cash (b) | 364,412 |  |  | 593,180 |  |  | 1,013,254 |  |  | 1,277,611 |  |  | 531,681 |  |  | (39 | ) | % | (31 | ) | %
Trading securities | 1,395,043 |  |  | 1,668,942 |  |  | 1,681,727 |  |  | 1,448,168 |  |  | 1,930,991 |  |  | (16 | ) | % | (28 | ) | %
Total earning assets | 38,746,937 |  |  | 37,501,271 |  |  | 36,548,294 |  |  | 36,200,964 |  |  | 35,958,079 |  |  | 3 |  | % | 8 |  | %
Cash and due from banks | 749,719 |  |  | 596,081 |  |  | 570,589 |  |  | 781,291 |  |  | 642,051 |  |  | 26 |  | % | 17 |  | %
Fixed income receivables (c) | 209,732 |  |  | 147,574 |  |  | 46,782 |  |  | 38,861 |  |  | 177,802 |  |  | 42 |  | % | 18 |  | %
Goodwill | 1,432,787 |  |  | 1,432,787 |  |  | 1,432,787 |  |  | 1,432,787 |  |  | 1,409,822 |  |  | * |  |  | 2 |  | %
Other intangible assets, net | 136,406 |  |  | 142,612 |  |  | 148,818 |  |  | 155,034 |  |  | 161,495 |  |  | (4 | ) | % | (16 | ) | %
Premises and equipment, net | 451,600 |  |  | 454,271 |  |  | 484,494 |  |  | 494,041 |  |  | 506,453 |  |  | (1 | ) | % | (11 | ) | %
Other real estate owned ("OREO") | 20,181 |  |  | 19,286 |  |  | 23,396 |  |  | 25,290 |  |  | 28,628 |  |  | 5 |  | % | (30 | ) | %
Allowance for loan losses | (193,149 | ) |  | (192,749 | ) |  | (184,911 | ) |  | (180,424 | ) |  | (185,959 | ) |  | * |  |  | 4 |  | %
Derivative assets | 250,786 |  |  | 185,521 |  |  | 118,128 |  |  | 81,475 |  |  | 54,476 |  |  | 35 |  | % | NM |  |
Other assets (d) | 1,912,685 |  |  | 1,885,116 |  |  | 1,910,626 |  |  | 1,802,939 |  |  | 1,883,077 |  |  | 1 |  | % | 2 |  | %
Total assets | $ | 43,717,684 |  |  | $ | 42,171,770 |  |  | $ | 41,099,003 |  |  | $ | 40,832,258 |  |  | $ | 40,635,924 |  |  | 4 |  | % | 8 |  | %
Liabilities and Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 13,670,204 |  |  | $ | 13,705,969 |  |  | $ | 13,707,310 |  |  | $ | 13,327,104 |  |  | $ | 12,800,892 |  |  | * |  |  | 7 |  | %
Commercial interest | 6,211,539 |  |  | 6,660,056 |  |  | 6,729,999 |  |  | 6,172,159 |  |  | 5,735,486 |  |  | (7 | ) | % | 8 |  | %
Market-indexed (e) | 3,794,105 |  |  | 3,855,545 |  |  | 4,062,531 |  |  | 5,042,412 |  |  | 4,445,826 |  |  | (2 | ) | % | (15 | ) | %
Total interest-bearing deposits | 23,675,848 |  |  | 24,221,570 |  |  | 24,499,840 |  |  | 24,541,675 |  |  | 22,982,204 |  |  | (2 | ) | % | 3 |  | %
Noninterest-bearing deposits | 8,268,812 |  |  | 8,086,748 |  |  | 7,963,048 |  |  | 8,141,317 |  |  | 8,025,881 |  |  | 2 |  | % | 3 |  | %
Total deposits | 31,944,660 |  |  | 32,308,318 |  |  | 32,462,888 |  |  | 32,682,992 |  |  | 31,008,085 |  |  | (1 | ) | % | 3 |  | %
Federal funds purchased | 936,837 |  |  | 666,007 |  |  | 339,360 |  |  | 256,567 |  |  | 437,474 |  |  | 41 |  | % | NM |  |
Securities sold under agreements to repurchase | 735,226 |  |  | 764,308 |  |  | 745,788 |  |  | 762,592 |  |  | 678,510 |  |  | (4 | ) | % | 8 |  | %
Trading liabilities | 719,777 |  |  | 558,347 |  |  | 429,669 |  |  | 335,380 |  |  | 739,694 |  |  | 29 |  | % | (3 | ) | %
Other short-term borrowings (f) | 2,276,139 |  |  | 865,347 |  |  | 140,832 |  |  | 114,764 |  |  | 1,069,912 |  |  | NM |  |  | NM |  |
Term borrowings (g) | 1,195,096 |  |  | 1,186,646 |  |  | 1,177,926 |  |  | 1,170,963 |  |  | 1,200,134 |  |  | 1 |  | % | * |  |
Fixed income payables (c) | 66,842 |  |  | 66,369 |  |  | 100,290 |  |  | 9,572 |  |  | 36,939 |  |  | 1 |  | % | 81 |  | %
Derivative liabilities | 83,530 |  |  | 88,485 |  |  | 107,123 |  |  | 133,713 |  |  | 170,324 |  |  | (6 | ) | % | (51 | ) | %
Other liabilities (d) | 763,534 |  |  | 741,862 |  |  | 748,606 |  |  | 580,335 |  |  | 552,921 |  |  | 3 |  | % | 38 |  | %
Total liabilities | 38,721,641 |  |  | 37,245,689 |  |  | 36,252,482 |  |  | 36,046,878 |  |  | 35,893,993 |  |  | 4 |  | % | 8 |  | %
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 194,487 |  |  | 195,299 |  |  | 197,101 |  |  | 199,108 |  |  | 202,464 |  |  | * |  |  | (4 | ) | %
Capital surplus | 2,925,309 |  |  | 2,941,696 |  |  | 2,983,948 |  |  | 3,029,425 |  |  | 3,101,102 |  |  | (1 | ) | % | (6 | ) | %
Undivided profits | 1,725,846 |  |  | 1,660,520 |  |  | 1,595,568 |  |  | 1,542,408 |  |  | 1,484,959 |  |  | 4 |  | % | 16 |  | %
Accumulated other comprehensive loss, net | (240,654 | ) |  | (262,489 | ) |  | (321,151 | ) |  | (376,616 | ) |  | (437,649 | ) |  | (8 | ) | % | (45 | ) | %
Preferred stock | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | * |  |  | * |  |
Noncontrolling interest (h) | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | * |  |  | * |  |
Total equity | 4,996,043 |  |  | 4,926,081 |  |  | 4,846,521 |  |  | 4,785,380 |  |  | 4,741,931 |  |  | 1 |  | % | 5 |  | %
Total liabilities and equity | $ | 43,717,684 |  |  | $ | 42,171,770 |  |  | $ | 41,099,003 |  |  | $ | 40,832,258 |  |  | $ | 40,635,924 |  |  | 4 |  | % | 8 |  | %

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

(a) | 3Q19 includes $449.1 million of SBA and USDA loans, $100.3 million of mortgage loans, and $5.5 million of other consumer loans.

(b) | Includes excess balances held at Fed.

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

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

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

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

(g) | 4Q18 decrease includes the retirement of $35.1 million of TRUPS debt.

(h) | Consists of preferred stock of subsidiaries.

9

FHN CONSOLIDATED AVERAGE BALANCE SHEET
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and industrial (C&I) (a) | $ | 18,965,829 |  |  | $ | 17,952,866 |  |  | $ | 16,428,088 |  |  | $ | 15,952,608 |  |  | $ | 16,038,920 |  |  | 6 |  | % | 18 |  | %
Commercial real estate (a) | 4,269,425 |  |  | 3,910,466 |  |  | 3,959,592 |  |  | 4,170,186 |  |  | 4,226,580 |  |  | 9 |  | % | 1 |  | %
Consumer real estate | 6,094,274 |  |  | 6,109,805 |  |  | 6,194,147 |  |  | 6,274,799 |  |  | 6,199,910 |  |  | * |  |  | (2 | ) | %
Permanent mortgage | 189,214 |  |  | 200,234 |  |  | 216,037 |  |  | 228,184 |  |  | 348,922 |  |  | (6 | ) | % | (46 | ) | %
Credit card and other | 497,646 |  |  | 498,790 |  |  | 515,436 |  |  | 528,866 |  |  | 532,890 |  |  | * |  |  | (7 | ) | %
Total loans, net of unearned income (b) | 30,016,388 |  |  | 28,672,161 |  |  | 27,313,300 |  |  | 27,154,643 |  |  | 27,347,222 |  |  | 5 |  | % | 10 |  | %
Loans held-for-sale (c) | 455,239 |  |  | 606,685 |  |  | 670,401 |  |  | 714,388 |  |  | 727,508 |  |  | (25 | ) | % | (37 | ) | %
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | 100 |  |  | 99 |  |  | 99 |  |  | 98 |  |  | 98 |  |  | 1 |  | % | 2 |  | %
U.S. government agencies | 4,289,719 |  |  | 4,461,712 |  |  | 4,494,814 |  |  | 4,489,625 |  |  | 4,594,639 |  |  | (4 | ) | % | (7 | ) | %
States and municipalities | 49,025 |  |  | 41,911 |  |  | 33,400 |  |  | 27,573 |  |  | 14,332 |  |  | 17 |  | % | NM |  |
Corporate bonds | 50,414 |  |  | 64,720 |  |  | 65,194 |  |  | 65,033 |  |  | 65,505 |  |  | (22 | ) | % | (23 | ) | %
Other | 18,837 |  |  | 14,609 |  |  | 10,249 |  |  | 11,421 |  |  | 7,307 |  |  | 29 |  | % | NM |  |
Total investment securities | 4,408,095 |  |  | 4,583,051 |  |  | 4,603,756 |  |  | 4,593,750 |  |  | 4,681,881 |  |  | (4 | ) | % | (6 | ) | %
Trading securities | 1,391,405 |  |  | 1,564,201 |  |  | 1,443,969 |  |  | 1,634,726 |  |  | 1,501,857 |  |  | (11 | ) | % | (7 | ) | %
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 21,225 |  |  | 47,664 |  |  | 113,043 |  |  | 43,752 |  |  | 43,396 |  |  | (55 | ) | % | (51 | ) | %
Securities purchased under agreements to resell | 550,641 |  |  | 593,412 |  |  | 428,687 |  |  | 609,891 |  |  | 764,743 |  |  | (7 | ) | % | (28 | ) | %
Interest-bearing cash (d) | 545,784 |  |  | 648,927 |  |  | 1,717,696 |  |  | 1,073,540 |  |  | 486,280 |  |  | (16 | ) | % | 12 |  | %
Total other earning assets | 1,117,650 |  |  | 1,290,003 |  |  | 2,259,426 |  |  | 1,727,183 |  |  | 1,294,419 |  |  | (13 | ) | % | (14 | ) | %
Total earning assets | 37,388,777 |  |  | 36,716,101 |  |  | 36,290,852 |  |  | 35,824,690 |  |  | 35,552,887 |  |  | 2 |  | % | 5 |  | %
Allowance for loan losses | (196,586 | ) |  | (188,243 | ) |  | (182,332 | ) |  | (186,978 | ) |  | (186,204 | ) |  | 4 |  | % | 6 |  | %
Cash and due from banks | 596,323 |  |  | 590,622 |  |  | 610,470 |  |  | 615,199 |  |  | 597,578 |  |  | 1 |  | % | * |  |
Fixed income receivables | 75,938 |  |  | 64,958 |  |  | 55,393 |  |  | 56,519 |  |  | 54,176 |  |  | 17 |  | % | 40 |  | %
Premises and equipment, net | 451,567 |  |  | 478,607 |  |  | 485,462 |  |  | 499,867 |  |  | 518,017 |  |  | (6 | ) | % | (13 | ) | %
Derivative assets | 160,341 |  |  | 83,050 |  |  | 55,288 |  |  | 38,449 |  |  | 31,322 |  |  | 93 |  | % | NM |  |
Other assets (e) | 3,464,541 |  |  | 3,497,912 |  |  | 3,568,059 |  |  | 3,454,782 |  |  | 3,509,257 |  |  | (1 | ) | % | (1 | ) | %
Total assets | $ | 41,940,901 |  |  | $ | 41,243,007 |  |  | $ | 40,883,192 |  |  | $ | 40,302,528 |  |  | $ | 40,077,033 |  |  | 2 |  | % | 5 |  | %
Liabilities and equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 13,670,745 |  |  | $ | 13,597,195 |  |  | $ | 13,390,692 |  |  | $ | 12,965,734 |  |  | $ | 12,663,181 |  |  | 1 |  | % | 8 |  | %
Commercial interest | 6,321,835 |  |  | 6,599,793 |  |  | 6,577,476 |  |  | 5,900,136 |  |  | 5,580,371 |  |  | (4 | ) | % | 13 |  | %
Market-indexed (f) | 4,143,012 |  |  | 3,818,949 |  |  | 4,734,295 |  |  | 4,947,192 |  |  | 4,486,335 |  |  | 8 |  | % | (8 | ) | %
Total interest-bearing deposits | 24,135,592 |  |  | 24,015,937 |  |  | 24,702,463 |  |  | 23,813,062 |  |  | 22,729,887 |  |  | * |  |  | 6 |  | %
Federal funds purchased | 886,445 |  |  | 519,497 |  |  | 370,868 |  |  | 334,036 |  |  | 454,670 |  |  | 71 |  | % | 95 |  | %
Securities sold under agreements to repurchase | 722,815 |  |  | 691,490 |  |  | 688,765 |  |  | 710,898 |  |  | 720,716 |  |  | 5 |  | % | * |  |
Trading liabilities | 501,203 |  |  | 548,653 |  |  | 375,169 |  |  | 543,696 |  |  | 702,026 |  |  | (9 | ) | % | (29 | ) | %
Other short-term borrowings (g) | 535,585 |  |  | 650,387 |  |  | 114,474 |  |  | 244,413 |  |  | 861,865 |  |  | (18 | ) | % | (38 | ) | %
Term borrowings | 1,185,853 |  |  | 1,183,205 |  |  | 1,172,618 |  |  | 1,172,405 |  |  | 1,235,166 |  |  | * |  |  | (4 | ) | %
Total interest-bearing liabilities | 27,967,493 |  |  | 27,609,169 |  |  | 27,424,357 |  |  | 26,818,510 |  |  | 26,704,330 |  |  | 1 |  | % | 5 |  | %
Noninterest-bearing deposits | 8,235,806 |  |  | 7,947,607 |  |  | 7,795,015 |  |  | 8,034,692 |  |  | 8,117,349 |  |  | 4 |  | % | 1 |  | %
Fixed income payables | 33,059 |  |  | 25,579 |  |  | 21,978 |  |  | 19,858 |  |  | 17,582 |  |  | 29 |  | % | 88 |  | %
Derivative liabilities | 19,632 |  |  | 61,715 |  |  | 94,943 |  |  | 147,075 |  |  | 114,211 |  |  | (68 | ) | % | (83 | ) | %
Other liabilities (e) | 722,570 |  |  | 729,776 |  |  | 737,664 |  |  | 551,695 |  |  | 512,259 |  |  | (1 | ) | % | 41 |  | %
Total liabilities | 36,978,560 |  |  | 36,373,846 |  |  | 36,073,957 |  |  | 35,571,830 |  |  | 35,465,731 |  |  | 2 |  | % | 4 |  | %
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock | 194,930 |  |  | 196,319 |  |  | 198,460 |  |  | 201,006 |  |  | 202,852 |  |  | (1 | ) | % | (4 | ) | %
Capital surplus | 2,934,276 |  |  | 2,964,824 |  |  | 3,015,017 |  |  | 3,068,536 |  |  | 3,108,721 |  |  | (1 | ) | % | (6 | ) | %
Undivided profits | 1,695,417 |  |  | 1,629,474 |  |  | 1,572,177 |  |  | 1,510,503 |  |  | 1,323,826 |  |  | 4 |  | % | 28 |  | %
Accumulated other comprehensive loss, net | (253,337 | ) |  | (312,511 | ) |  | (367,474 | ) |  | (440,402 | ) |  | (415,152 | ) |  | (19 | ) | % | 39 |  | %
Preferred stock | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | 95,624 |  |  | * |  |  | * |  |
Noncontrolling interest (h) | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | 295,431 |  |  | * |  |  | * |  |
Total equity | 4,962,341 |  |  | 4,869,161 |  |  | 4,809,235 |  |  | 4,730,698 |  |  | 4,611,302 |  |  | 2 |  | % | 8 |  | %
Total liabilities and equity | $ | 41,940,901 |  |  | $ | 41,243,007 |  |  | $ | 40,883,192 |  |  | $ | 40,302,528 |  |  | $ | 40,077,033 |  |  | 2 |  | % | 5 |  | %

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

(a) | In 3Q19, FHN reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses is immaterial. No adjustments were made to prior periods as the impact of the reclassification, including the effect on the allowance for loan losses was deemed to be immaterial in all periods.

(b) Includes loans on nonaccrual status.

(c) | 3Q19 includes $368.9 million of SBA and USDA loans, $80.7 million of mortgage loans, and $5.7 million of other consumer loans.

(d) | Includes excess balances held at Fed.

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

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

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

(h) | Consists of preferred stock of subsidiaries.

10

FHN CONSOLIDATED NET INTEREST INCOME (a)
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Interest Income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income (b) | $ | 357,724 |  |  | $ | 354,067 |  |  | $ | 334,167 |  |  | $ | 333,935 |  |  | $ | 333,088 |  |  | 1 |  | % | 7 |  | %
Loans held-for-sale | 6,069 |  |  | 8,128 |  |  | 9,877 |  |  | 11,759 |  |  | 9,977 |  |  | (25 | ) | % | (39 | ) | %
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 26,322 |  |  | 29,075 |  |  | 30,107 |  |  | 30,744 |  |  | 31,106 |  |  | (9 | ) | % | (15 | ) | %
States and municipalities | 431 |  |  | 347 |  |  | 362 |  |  | 300 |  |  | 129 |  |  | 24 |  | % | NM |  |
Corporate bonds | 593 |  |  | 713 |  |  | 712 |  |  | 716 |  |  | 714 |  |  | (17 | ) | % | (17 | ) | %
Other | 1,634 |  |  | 1,278 |  |  | 895 |  |  | 955 |  |  | 592 |  |  | 28 |  | % | NM |  |
Total investment securities | 28,980 |  |  | 31,413 |  |  | 32,076 |  |  | 32,715 |  |  | 32,541 |  |  | (8 | ) | % | (11 | ) | %
Trading securities | 10,645 |  |  | 13,332 |  |  | 13,712 |  |  | 15,533 |  |  | 14,305 |  |  | (20 | ) | % | (26 | ) | %
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 141 |  |  | 326 |  |  | 733 |  |  | 304 |  |  | 273 |  |  | (57 | ) | % | (48 | ) | %
Securities purchased under agreements to resell | 2,800 |  |  | 3,301 |  |  | 2,336 |  |  | 3,197 |  |  | 3,510 |  |  | (15 | ) | % | (20 | ) | %
Interest-bearing cash | 2,700 |  |  | 3,689 |  |  | 10,209 |  |  | 5,884 |  |  | 2,257 |  |  | (27 | ) | % | 20 |  | %
Total other earning assets | 5,641 |  |  | 7,316 |  |  | 13,278 |  |  | 9,385 |  |  | 6,040 |  |  | (23 | ) | % | (7 | ) | %
Interest income | $ | 409,059 |  |  | $ | 414,256 |  |  | $ | 403,110 |  |  | $ | 403,327 |  |  | $ | 395,951 |  |  | (1 | ) | % | 3 |  | %
Interest Expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | $ | 26,670 |  |  | $ | 25,666 |  |  | $ | 24,641 |  |  | $ | 21,607 |  |  | $ | 17,968 |  |  | 4 |  | % | 48 |  | %
Commercial interest | 28,112 |  |  | 29,927 |  |  | 28,153 |  |  | 22,706 |  |  | 18,302 |  |  | (6 | ) | % | 54 |  | %
Market-indexed (c) | 23,809 |  |  | 23,409 |  |  | 29,416 |  |  | 29,366 |  |  | 22,820 |  |  | 2 |  | % | 4 |  | %
Total interest-bearing deposits | 78,591 |  |  | 79,002 |  |  | 82,210 |  |  | 73,679 |  |  | 59,090 |  |  | (1 | ) | % | 33 |  | %
Federal funds purchased | 4,898 |  |  | 3,142 |  |  | 2,287 |  |  | 1,933 |  |  | 2,355 |  |  | 56 |  | % | NM |  |
Securities sold under agreements to repurchase | 3,301 |  |  | 3,580 |  |  | 3,496 |  |  | 3,329 |  |  | 2,780 |  |  | (8 | ) | % | 19 |  | %
Trading liabilities | 2,943 |  |  | 3,756 |  |  | 2,816 |  |  | 4,320 |  |  | 5,125 |  |  | (22 | ) | % | (43 | ) | %
Other short-term borrowings | 3,333 |  |  | 4,316 |  |  | 961 |  |  | 1,571 |  |  | 4,627 |  |  | (23 | ) | % | (28 | ) | %
Term borrowings | 13,752 |  |  | 14,683 |  |  | 14,337 |  |  | 13,842 |  |  | 13,992 |  |  | (6 | ) | % | (2 | ) | %
Interest expense | 106,818 |  |  | 108,479 |  |  | 106,107 |  |  | 98,674 |  |  | 87,969 |  |  | (2 | ) | % | 21 |  | %
Net interest income - tax equivalent basis | 302,241 |  |  | 305,777 |  |  | 297,003 |  |  | 304,653 |  |  | 307,982 |  |  | (1 | ) | % | (2 | ) | %
Fully taxable equivalent adjustment | (1,565 | ) |  | (2,167 | ) |  | (2,495 | ) |  | (2,141 | ) |  | (2,282 | ) |  | 28 |  | % | 31 |  | %
Net interest income | $ | 300,676 |  |  | $ | 303,610 |  |  | $ | 294,508 |  |  | $ | 302,512 |  |  | $ | 305,700 |  |  | (1 | ) | % | (2 | ) | %

NM - Not meaningful
*Amount i s less than one percent.

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

(b) | Includes interest on loans in nonaccrual status.

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

11

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

| 3Q19 |  |  |  | 2Q19 |  |  |  | 1Q19 |  |  |  | 4Q18 |  |  |  | 3Q18 |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earning assets (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income (b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans | 4.78 |  | % |  | 5.05 |  | % |  | 5.08 |  | % |  | 5.00 |  | % |  | 4.95 |  | %
Consumer loans | 4.55 |  |  |  | 4.65 |  |  |  | 4.59 |  |  |  | 4.54 |  |  |  | 4.51 |  |
Total loans, net of unearned income (c) | 4.73 |  |  |  | 4.95 |  |  |  | 4.96 |  |  |  | 4.88 |  |  |  | 4.84 |  |
Loans held-for-sale | 5.33 |  |  |  | 5.36 |  |  |  | 5.89 |  |  |  | 6.58 |  |  |  | 5.49 |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | 2.45 |  |  |  | 2.61 |  |  |  | 2.68 |  |  |  | 2.74 |  |  |  | 2.71 |  |
States and municipalities | 3.51 |  |  |  | 3.31 |  |  |  | 4.33 |  |  |  | 4.36 |  |  |  | 3.60 |  |
Corporate bonds | 4.71 |  |  |  | 4.41 |  |  |  | 4.37 |  |  |  | 4.40 |  |  |  | 4.36 |  |
Other | 34.52 |  |  |  | 34.73 |  |  |  | 34.56 |  |  |  | 33.16 |  |  |  | 31.97 |  |
Total investment securities | 2.63 |  |  |  | 2.74 |  |  |  | 2.79 |  |  |  | 2.85 |  |  |  | 2.78 |  |
Trading securities | 3.06 |  |  |  | 3.41 |  |  |  | 3.80 |  |  |  | 3.80 |  |  |  | 3.81 |  |
Other earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal funds sold | 2.64 |  |  |  | 2.74 |  |  |  | 2.63 |  |  |  | 2.76 |  |  |  | 2.50 |  |
Securities purchased under agreements to resell | 2.02 |  |  |  | 2.23 |  |  |  | 2.21 |  |  |  | 2.08 |  |  |  | 1.82 |  |
Interest-bearing cash | 1.96 |  |  |  | 2.28 |  |  |  | 2.41 |  |  |  | 2.17 |  |  |  | 1.84 |  |
Total other earning assets | 2.00 |  |  |  | 2.27 |  |  |  | 2.38 |  |  |  | 2.16 |  |  |  | 1.85 |  |
Interest income/total earning assets | 4.35 |  | % |  | 4.52 |  | % |  | 4.49 |  | % |  | 4.47 |  | % |  | 4.43 |  | %
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer interest | 0.77 |  | % |  | 0.76 |  | % |  | 0.75 |  | % |  | 0.66 |  | % |  | 0.56 |  | %
Commercial interest | 1.76 |  |  |  | 1.82 |  |  |  | 1.74 |  |  |  | 1.53 |  |  |  | 1.30 |  |
Market-indexed (d) | 2.28 |  |  |  | 2.46 |  |  |  | 2.52 |  |  |  | 2.35 |  |  |  | 2.02 |  |
Total interest-bearing deposits | 1.29 |  |  |  | 1.32 |  |  |  | 1.35 |  |  |  | 1.23 |  |  |  | 1.03 |  |
Federal funds purchased | 2.19 |  |  |  | 2.43 |  |  |  | 2.50 |  |  |  | 2.30 |  |  |  | 2.05 |  |
Securities sold under agreements to repurchase | 1.81 |  |  |  | 2.08 |  |  |  | 2.06 |  |  |  | 1.86 |  |  |  | 1.53 |  |
Trading liabilities | 2.33 |  |  |  | 2.75 |  |  |  | 3.04 |  |  |  | 3.15 |  |  |  | 2.90 |  |
Other short-term borrowings | 2.47 |  |  |  | 2.66 |  |  |  | 3.40 |  |  |  | 2.55 |  |  |  | 2.13 |  |
Term borrowings (e) | 4.64 |  |  |  | 4.96 |  |  |  | 4.89 |  |  |  | 4.72 |  |  |  | 4.53 |  |
Interest expense/total interest-bearing liabilities | 1.52 |  |  |  | 1.58 |  |  |  | 1.57 |  |  |  | 1.46 |  |  |  | 1.31 |  |
Net interest spread | 2.83 |  | % |  | 2.94 |  | % |  | 2.92 |  | % |  | 3.01 |  | % |  | 3.12 |  | %
Effect of interest-free sources used to fund earning assets | 0.38 |  |  |  | 0.40 |  |  |  | 0.39 |  |  |  | 0.37 |  |  |  | 0.32 |  |
Net interest margin | 3.21 |  | % |  | 3.34 |  | % |  | 3.31 |  | % |  | 3.38 |  | % |  | 3.44 |  | %
Total loan yield | 4.73 |  | % |  | 4.95 |  | % |  | 4.96 |  | % |  | 4.88 |  | % |  | 4.84 |  | %
Total deposit cost | 0.96 |  | % |  | 0.99 |  | % |  | 1.03 |  | % |  | 0.92 |  | % |  | 0.76 |  | %

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

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

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

(c) | Includes loans on nonaccrual status.

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

(e) | Rates are expressed net of unamortized debenture cost for term borrowings.

12

FHN CAPITAL HIGHLIGHTS
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Dollars and shares in thousands) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Common equity tier 1 capital (a) (b) (c) | $ | 3,326,059 |  |  | $ | 3,270,484 |  |  | $ | 3,239,249 |  |  | $ | 3,223,702 |  |  | $ | 3,252,825 |  |  | 2 |  | % | 2 |  | %
Tier 1 capital (a) (b) (c) | 3,679,398 |  |  | 3,620,001 |  |  | 3,583,577 |  |  | 3,565,373 |  |  | 3,589,565 |  |  | 2 |  | % | 3 |  | %
Total capital (a) (c) | 4,065,306 |  |  | 4,009,116 |  |  | 3,963,901 |  |  | 3,940,117 |  |  | 3,973,141 |  |  | 1 |  | % | 2 |  | %
Risk-weighted assets (“RWA”) (a) (b) | 36,989,100 |  |  | 35,341,740 |  |  | 33,656,950 |  |  | 33,002,595 |  |  | 33,041,617 |  |  | 5 |  | % | 12 |  | %
Average assets for leverage (a) (b) | 40,660,443 |  |  | 40,022,187 |  |  | 39,717,387 |  |  | 39,221,755 |  |  | 38,962,431 |  |  | 2 |  | % | 4 |  | %
Common equity tier 1 ratio (a) (b) (c) | 8.99 |  | % | 9.25 |  | % | 9.62 |  | % | 9.77 |  | % | 9.84 |  | % |  |  |  |  |  |
Tier 1 ratio (a) (b) (c) | 9.95 |  | % | 10.24 |  | % | 10.65 |  | % | 10.80 |  | % | 10.86 |  | % |  |  |  |  |  |
Total capital ratio (a) (c) | 10.99 |  | % | 11.34 |  | % | 11.78 |  | % | 11.94 |  | % | 12.02 |  | % |  |  |  |  |  |
Leverage ratio (a) (b) | 9.05 |  | % | 9.04 |  | % | 9.02 |  | % | 9.09 |  | % | 9.21 |  | % |  |  |  |  |  |
Total equity to total assets (c) | 11.43 |  | % | 11.68 |  | % | 11.79 |  | % | 11.72 |  | % | 11.67 |  | % |  |  |  |  |  |
Tangible common equity/tangible assets (“TCE/TA”) (c) (d) | 7.20 |  | % | 7.29 |  | % | 7.27 |  | % | 7.15 |  | % | 7.12 |  | % |  |  |  |  |  |
Period-end shares outstanding (e) | 311,180 |  |  | 312,478 |  |  | 315,361 |  |  | 318,573 |  |  | 323,943 |  |  | * |  |  | (4 | ) | %
Cash dividends declared per common share | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.12 |  |  | $ | 0.12 |  |  | * |  |  | 17 |  | %
Book value per common share (c) | $ | 14.80 |  |  | $ | 14.51 |  |  | $ | 14.13 |  |  | $ | 13.79 |  |  | $ | 13.43 |  |  | 2 |  | % | 10 |  | %
Tangible book value per common share (c) (d) | $ | 9.76 |  |  | $ | 9.47 |  |  | $ | 9.11 |  |  | $ | 8.81 |  |  | $ | 8.58 |  |  | 3 |  | % | 14 |  | %
Market capitalization (millions) | $ | 5,041.1 |  |  | $ | 4,665.3 |  |  | $ | 4,408.7 |  |  | $ | 4,192.4 |  |  | $ | 5,591.3 |  |  | 8 |  | % | (10 | ) | %

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) | 3Q18 includes the effect of the pre-tax gain of $212.9 million from the sale of Visa Class B Shares.

(d) | TCE/TA and Tangible book value per common share are non-GAAP measures and are reconciled to Total equity to total assets (GAAP) and to Book value per common share (GAAP), respectively, in the Non-GAAP to GAAP reconciliation on page 22 of this financial supplement.

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

13

FHN BUSINESS SEGMENT HIGHLIGHTS
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Thousands) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 302,370 |  |  | $ | 297,339 |  |  | $ | 285,913 |  |  | $ | 298,288 |  |  | $ | 301,099 |  |  | 2 |  | % | * |  |
Noninterest income (a) | 85,776 |  |  | 81,475 |  |  | 73,030 |  |  | 70,003 |  |  | 80,705 |  |  | 5 |  | % | 6 |  | %
Total revenues | 388,146 |  |  | 378,814 |  |  | 358,943 |  |  | 368,291 |  |  | 381,804 |  |  | 2 |  | % | 2 |  | %
Provision for loan losses | 20,472 |  |  | 17,775 |  |  | 13,443 |  |  | 8,488 |  |  | 7,205 |  |  | 15 |  | % | NM |  |
Noninterest expense | 193,211 |  |  | 193,268 |  |  | 199,468 |  |  | 206,001 |  |  | 207,549 |  |  | * |  |  | (7 | ) | %
Income before income taxes | 174,463 |  |  | 167,771 |  |  | 146,032 |  |  | 153,802 |  |  | 167,050 |  |  | 4 |  | % | 4 |  | %
Provision for income taxes | 41,762 |  |  | 39,507 |  |  | 33,860 |  |  | 36,077 |  |  | 39,195 |  |  | 6 |  | % | 7 |  | %
Net income | $ | 132,701 |  |  | $ | 128,264 |  |  | $ | 112,172 |  |  | $ | 117,725 |  |  | $ | 127,855 |  |  | 3 |  | % | 4 |  | %
Fixed Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 5,309 |  |  | $ | 6,171 |  |  | $ | 7,331 |  |  | $ | 9,011 |  |  | $ | 9,054 |  |  | (14 | ) | % | (41 | ) | %
Noninterest income | 77,809 |  |  | 65,622 |  |  | 53,807 |  |  | 39,678 |  |  | 41,124 |  |  | 19 |  | % | 89 |  | %
Total revenues | 83,118 |  |  | 71,793 |  |  | 61,138 |  |  | 48,689 |  |  | 50,178 |  |  | 16 |  | % | 66 |  | %
Noninterest expense (b) | 67,787 |  |  | 55,770 |  |  | 50,774 |  |  | 46,516 |  |  | 46,561 |  |  | 22 |  | % | 46 |  | %
Income before income taxes | 15,331 |  |  | 16,023 |  |  | 10,364 |  |  | 2,173 |  |  | 3,617 |  |  | (4 | ) | % | NM |  |
Provision/(benefit) for income taxes | 3,656 |  |  | 3,781 |  |  | 2,397 |  |  | 408 |  |  | 719 |  |  | (3 | ) | % | NM |  |
Net income | $ | 11,675 |  |  | $ | 12,242 |  |  | $ | 7,967 |  |  | $ | 1,765 |  |  | $ | 2,898 |  |  | (5 | ) | % | NM |  |
Corporate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income/(expense) | $ | (13,225 | ) |  | $ | (7,034 | ) |  | $ | (7,803 | ) |  | $ | (15,356 | ) |  | $ | (15,462 | ) |  | (88 | ) | % | 14 |  | %
Noninterest income (c) | 7,359 |  |  | 9,400 |  |  | 13,352 |  |  | (1,411 | ) |  | 222,620 |  |  | (22 | ) | % | (97 | ) | %
Total revenues | (5,866 | ) |  | 2,366 |  |  | 5,549 |  |  | (16,767 | ) |  | 207,158 |  |  | NM |  |  | NM |  |
Noninterest expense (d) | 41,993 |  |  | 55,500 |  |  | 40,374 |  |  | 23,144 |  |  | 33,561 |  |  | (24 | ) | % | 25 |  | %
Income/(loss) before income taxes | (47,859 | ) |  | (53,134 | ) |  | (34,825 | ) |  | (39,911 | ) |  | 173,597 |  |  | 10 |  | % | NM |  |
Provision/ (benefit) for income taxes (e) | (11,550 | ) |  | (13,159 | ) |  | (11,396 | ) |  | (14,608 | ) |  | 40,458 |  |  | 12 |  | % | NM |  |
Net income/(loss) | $ | (36,309 | ) |  | $ | (39,975 | ) |  | $ | (23,429 | ) |  | $ | (25,303 | ) |  | $ | 133,139 |  |  | 9 |  | % | NM |  |
Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 6,222 |  |  | $ | 7,134 |  |  | $ | 9,067 |  |  | $ | 10,569 |  |  | $ | 11,009 |  |  | (13 | ) | % | (43 | ) | %
Noninterest income (f) | 791 |  |  | 1,496 |  |  | 856 |  |  | 2,004 |  |  | 4,523 |  |  | (47 | ) | % | (83 | ) | %
Total revenues | 7,013 |  |  | 8,630 |  |  | 9,923 |  |  | 12,573 |  |  | 15,532 |  |  | (19 | ) | % | (55 | ) | %
Provision/(provision credit) for loan losses | (5,472 | ) |  | (4,775 | ) |  | (4,443 | ) |  | (2,488 | ) |  | (5,205 | ) |  | (15 | ) | % | (5 | ) | %
Noninterest expense (g) | 4,681 |  |  | (4,144 | ) |  | 5,474 |  |  | 6,271 |  |  | 6,360 |  |  | NM |  |  | (26 | ) | %
Income before income taxes | 7,804 |  |  | 17,549 |  |  | 8,892 |  |  | 8,790 |  |  | 14,377 |  |  | (56 | ) | % | (46 | ) | %
Provision for income taxes | 1,928 |  |  | 4,338 |  |  | 2,197 |  |  | 2,172 |  |  | 3,553 |  |  | (56 | ) | % | (46 | ) | %
Net income | $ | 5,876 |  |  | $ | 13,211 |  |  | $ | 6,695 |  |  | $ | 6,618 |  |  | $ | 10,824 |  |  | (56 | ) | % | (46 | ) | %
Total Consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 300,676 |  |  | $ | 303,610 |  |  | $ | 294,508 |  |  | $ | 302,512 |  |  | $ | 305,700 |  |  | (1 | ) | % | (2 | ) | %
Noninterest income | 171,735 |  |  | 157,993 |  |  | 141,045 |  |  | 110,274 |  |  | 348,972 |  |  | 9 |  | % | (51 | ) | %
Total revenues | 472,411 |  |  | 461,603 |  |  | 435,553 |  |  | 412,786 |  |  | 654,672 |  |  | 2 |  | % | (28 | ) | %
Provision/(provision credit) for loan losses | 15,000 |  |  | 13,000 |  |  | 9,000 |  |  | 6,000 |  |  | 2,000 |  |  | 15 |  | % | NM |  |
Noninterest expense | 307,672 |  |  | 300,394 |  |  | 296,090 |  |  | 281,932 |  |  | 294,031 |  |  | 2 |  | % | 5 |  | %
Income before income taxes | 149,739 |  |  | 148,209 |  |  | 130,463 |  |  | 124,854 |  |  | 358,641 |  |  | 1 |  | % | (58 | ) | %
Provision for income taxes | 35,796 |  |  | 34,467 |  |  | 27,058 |  |  | 24,049 |  |  | 83,925 |  |  | 4 |  | % | (57 | ) | %
Net income | $ | 113,943 |  |  | $ | 113,742 |  |  | $ | 103,405 |  |  | $ | 100,805 |  |  | $ | 274,716 |  |  | * |  |  | (59 | ) | %

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

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

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

(c) | 1Q19 and 4Q18 include $6.2 million and $(7.1) million of deferred compensation income driven by equity market valuations; 1Q19 includes a $1.8 million negative valuation adjustment on HFS consumer loans included in the Non-Strategic segment; 3Q18 includes a pre-tax gain of $212.9 million from the sale of Visa Class B shares.

(d) | Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 8 for additional information about variability in quarterly balances; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.

(e) | 3Q18 reflects the tax effect on the gain on the sale of Visa Class B Shares.

(f) | 2Q19 and 3Q18 include $1.1 million and $3.8 million, respectively, of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.

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

14

FHN REGIONAL BANKING
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 302,370 |  |  | $ | 297,339 |  |  | $ | 285,913 |  |  | $ | 298,288 |  |  | $ | 301,099 |  |  | 2 |  | % | * |  |
Provision for loan losses | 20,472 |  |  | 17,775 |  |  | 13,443 |  |  | 8,488 |  |  | 7,205 |  |  | 15 |  | % | NM |  |
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
NSF / Overdraft fees (a) | 13,699 |  |  | 12,347 |  |  | 11,579 |  |  | 14,128 |  |  | 13,583 |  |  | 11 |  | % | 1 |  | %
Cash management fees | 9,561 |  |  | 8,026 |  |  | 8,857 |  |  | 9,073 |  |  | 9,237 |  |  | 19 |  | % | 4 |  | %
Debit card income (b) | 4,749 |  |  | 4,960 |  |  | 5,372 |  |  | (3,142 | ) |  | 7,811 |  |  | (4 | ) | % | (39 | ) | %
Other | 4,574 |  |  | 5,275 |  |  | 4,195 |  |  | 3,554 |  |  | 3,357 |  |  | (13 | ) | % | 36 |  | %
Total deposit transactions and cash management | 32,583 |  |  | 30,608 |  |  | 30,003 |  |  | 23,613 |  |  | 33,988 |  |  | 6 |  | % | (4 | ) | %
Brokerage, management fees and commissions | 14,156 |  |  | 14,118 |  |  | 12,630 |  |  | 13,377 |  |  | 14,199 |  |  | * |  |  | * |  |
Trust services and investment management | 7,190 |  |  | 7,902 |  |  | 7,056 |  |  | 6,961 |  |  | 7,453 |  |  | (9 | ) | % | (4 | ) | %
Bankcard income | 7,028 |  |  | 6,594 |  |  | 7,039 |  |  | 7,738 |  |  | 7,866 |  |  | 7 |  | % | (11 | ) | %
Other service charges | 5,650 |  |  | 5,460 |  |  | 3,711 |  |  | 3,255 |  |  | 3,447 |  |  | 3 |  | % | 64 |  | %
Miscellaneous revenue (c) | 19,169 |  |  | 16,793 |  |  | 12,591 |  |  | 15,059 |  |  | 13,752 |  |  | 14 |  | % | 39 |  | %
Total noninterest income | 85,776 |  |  | 81,475 |  |  | 73,030 |  |  | 70,003 |  |  | 80,705 |  |  | 5 |  | % | 6 |  | %
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation, incentives, and benefits | 73,713 |  |  | 76,752 |  |  | 81,796 |  |  | 82,304 |  |  | 81,140 |  |  | (4 | ) | % | (9 | ) | %
Other (d) | 119,498 |  |  | 116,516 |  |  | 117,672 |  |  | 123,697 |  |  | 126,409 |  |  | 3 |  | % | (5 | ) | %
Total noninterest expense | 193,211 |  |  | 193,268 |  |  | 199,468 |  |  | 206,001 |  |  | 207,549 |  |  | * |  |  | (7 | ) | %
Income before income taxes | $ | 174,463 |  |  | $ | 167,771 |  |  | $ | 146,032 |  |  | $ | 153,802 |  |  | $ | 167,050 |  |  | 4 |  | % | 4 |  | %
PPNR (e) | 194,935 |  |  | 185,546 |  |  | 159,475 |  |  | 162,290 |  |  | 174,255 |  |  | 5 |  | % | 12 |  | %
Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average loans | $ | 28,958 |  |  | $ | 27,533 |  |  | $ | 26,107 |  |  | $ | 25,877 |  |  | $ | 25,964 |  |  | 5 |  | % | 12 |  | %
Average other earning assets | 47 |  |  | 47 |  |  | 39 |  |  | 41 |  |  | 60 |  |  | * |  |  | (22 | ) | %
Total average earning assets | 29,005 |  |  | 27,580 |  |  | 26,146 |  |  | 25,918 |  |  | 26,024 |  |  | 5 |  | % | 11 |  | %
Total average deposits | 30,044 |  |  | 29,954 |  |  | 29,590 |  |  | 28,316 |  |  | 27,565 |  |  | * |  |  | 9 |  | %
Total period-end deposits | 30,060 |  |  | 30,272 |  |  | 30,354 |  |  | 29,344 |  |  | 27,726 |  |  | (1 | ) | % | 8 |  | %
Total period-end assets | 33,157 |  |  | 31,340 |  |  | 29,544 |  |  | 29,126 |  |  | 28,739 |  |  | 6 |  | % | 15 |  | %
Key Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (quarters are annualized) (f) | 1.66% |  |  | 1.70% |  |  | 1.58% |  |  | 1.64% |  |  | 1.78% |  |  |  |  |  |
Return on allocated equity (f) (g) | 17.53% |  |  | 17.38% |  |  | 15.54% |  |  | 15.86% |  |  | 16.90% |  |  |  |  |  |
Fee income to total revenue (f) | 22.10% |  |  | 21.51% |  |  | 20.35% |  |  | 19.01% |  |  | 21.14% |  |  |  |  |  |
Efficiency ratio (f) | 49.78% |  |  | 51.02% |  |  | 55.57% |  |  | 55.93% |  |  | 54.36% |  |  |  |  |  |
Net interest margin (h) | 4.16% |  |  | 4.35% |  |  | 4.47% |  |  | 4.60% |  |  | 4.62% |  |  |  |  |  |
Net interest spread | 3.82% |  |  | 3.99% |  |  | 3.98% |  |  | 4.04% |  |  | 4.08% |  |  |  |  |  |
Loan average yield | 4.68% |  |  | 4.88% |  |  | 4.86% |  |  | 4.78% |  |  | 4.69% |  |  |  |  |  |
Deposit average rate | 0.86% |  |  | 0.89% |  |  | 0.88% |  |  | 0.74% |  |  | 0.61% |  |  |  |  |  |
Regional banking net charge-offs/(recoveries) | $ | 17,074 |  |  | $ | 7,841 |  |  | $ | 5,540 |  |  | $ | 12,597 |  |  | $ | 3,693 |  |  | NM |  |  | NM |  |
Financial center locations (i) | 270 |  |  | 292 |  |  | 292 |  |  | 292 |  |  | 292 |  |  | (8 | ) | % | (8 | ) | %

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

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

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

(c) | 3Q19 and 2Q19 increase due in large part to higher fees from derivative sales.

(d) | 3Q18 includes a $1.6 million expense reversal related to a recovery of prior litigation losses.

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

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

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

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

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

15

FHN FIXED INCOME
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 5,309 |  |  | $ | 6,171 |  |  | $ | 7,331 |  |  | $ | 9,011 |  |  | $ | 9,054 |  |  | (14 | ) | % | (41 | ) | %
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income product revenue | 63,646 |  |  | 54,533 |  |  | 44,472 |  |  | 30,028 |  |  | 34,268 |  |  | 17 |  | % | 86 |  | %
Other | 14,163 |  |  | 11,089 |  |  | 9,335 |  |  | 9,650 |  |  | 6,856 |  |  | 28 |  | % | NM |  |
Total noninterest income | 77,809 |  |  | 65,622 |  |  | 53,807 |  |  | 39,678 |  |  | 41,124 |  |  | 19 |  | % | 89 |  | %
Noninterest expense (a) | 67,787 |  |  | 55,770 |  |  | 50,774 |  |  | 46,516 |  |  | 46,561 |  |  | 22 |  | % | 46 |  | %
Income before income taxes | $ | 15,331 |  |  | $ | 16,023 |  |  | $ | 10,364 |  |  | $ | 2,173 |  |  | $ | 3,617 |  |  | (4 | ) | % | NM |  |
Fixed income product average daily revenue | $ | 994 |  |  | $ | 866 |  |  | $ | 729 |  |  | $ | 492 |  |  | $ | 544 |  |  | 15 |  | % | 83 |  | %
Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average trading inventory | $ | 1,390 |  |  | $ | 1,563 |  |  | $ | 1,443 |  |  | $ | 1,633 |  |  | $ | 1,500 |  |  | (11 | ) | % | (7 | ) | %
Average loans held-for-sale | 367 |  |  | 528 |  |  | 571 |  |  | 608 |  |  | 617 |  |  | (30 | ) | % | (41 | ) | %
Average other earning assets | 709 |  |  | 670 |  |  | 491 |  |  | 675 |  |  | 826 |  |  | 6 |  | % | (14 | ) | %
Total average earning assets | 2,466 |  |  | 2,761 |  |  | 2,505 |  |  | 2,916 |  |  | 2,943 |  |  | (11 | ) | % | (16 | ) | %
Total period-end assets | 3,323 |  |  | 3,233 |  |  | 3,094 |  |  | 2,789 |  |  | 3,742 |  |  | 3 |  | % | (11 | ) | %
Key Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (b) | 1.61 | % |  | 1.57 | % |  | 1.13 | % |  | 0.22 | % |  | 0.35 | % |  |  |  |  |
Return on allocated equity (b) (c) | 23.30 | % |  | 24.29 | % |  | 16.20 | % |  | 3.38 | % |  | 5.47 | % |  |  |  |  |
Efficiency ratio (b) | 81.56 | % |  | 77.68 | % |  | 83.05 | % |  | 95.54 | % |  | 92.79 | % |  |  |  |  |
Net interest margin (d) | 0.88 | % |  | 0.92 | % |  | 1.19 | % |  | 1.26 | % |  | 1.26 | % |  |  |  |  |

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

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

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

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

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

FHN CORPORATE
Quarterly, Unaudited

|  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income/(expense) | $ | (13,225 | ) |  | $ | (7,034 | ) |  | $ | (7,803 | ) |  | $ | (15,356 | ) |  | $ | (15,462 | ) |  | (88 | ) | % | 14 |  | %
Noninterest income excluding securities gains/(losses) (a) | 7,262 |  |  | 9,351 |  |  | 13,321 |  |  | (1,383 | ) |  | 9,762 |  |  | (22 | ) | % | (26 | ) | %
Securities gains/(losses), net (b) | 97 |  |  | 49 |  |  | 31 |  |  | (28 | ) |  | 212,858 |  |  | 99 |  | % | NM |  |
Noninterest expense (c) | 41,993 |  |  | 55,500 |  |  | 40,374 |  |  | 23,144 |  |  | 33,561 |  |  | (24 | ) | % | 25 |  | %
Income/(loss) before income taxes | $ | (47,859 | ) |  | $ | (53,134 | ) |  | $ | (34,825 | ) |  | $ | (39,911 | ) |  | $ | 173,597 |  |  | 10 |  | % | NM |  |
Average Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average investment securities | $ | 4,389 |  |  | $ | 4,568 |  |  | $ | 4,594 |  |  | $ | 4,582 |  |  | $ | 4,675 |  |  | (4 | ) | % | (6 | ) | %
Total earning assets | $ | 4,916 |  |  | $ | 5,295 |  |  | $ | 6,463 |  |  | $ | 5,732 |  |  | $ | 5,213 |  |  | (7 | ) | % | (6 | ) | %
Deferred Compensation (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other Income | $ | 471 |  |  | $ | 1,938 |  |  | $ | 5,474 |  |  | $ | (6,124 | ) |  | $ | 1,458 |  |  | (76 | ) | % | (68 | ) | %
Employee compensation, incentives, and benefits | $ | 567 |  |  | $ | 2,150 |  |  | $ | 6,221 |  |  | $ | (6,983 | ) |  | $ | 1,968 |  |  | (74 | ) | % | (71 | ) | %

Estimated effective duration of securities portfolio 2.4 years in 3Q19 compared to 2.8 years in 2Q19
Certain previously reported amounts have been reclassified to agree with current presentation.
NM - Not Meaningful
* Amount is less than one percent.

(a) | 1Q19 includes higher deferred compensation income driven by equity market valuations; 4Q18 includes lower deferred compensation income driven by equity market valuations and a $1.8 million negative valuation adjustment on HFS consumer loans included in the Non-Strategic segment; 3Q19 and 3Q18 include $1.0 million and $.8 million, respectively, of gains on the sales of buildings.

(b) | 3Q18 includes a pre-tax gain of $212.9 million from the sale of Visa Class B Shares.

(c) | Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 8 for additional information about variability in quarterly balances; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.

16

FHN NON-STRATEGIC
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
| 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |  | 2Q19 | 3Q18
Income Statement (thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income | $ | 6,222 |  |  | $ | 7,134 |  |  | $ | 9,067 |  |  | $ | 10,569 |  |  | $ | 11,009 |  |  | (13 | ) | % | (43 | ) | %
Provision/(provision credit) for loan losses | (5,472 | ) |  | (4,775 | ) |  | (4,443 | ) |  | (2,488 | ) |  | (5,205 | ) |  | (15 | ) | % | (5 | ) | %
Noninterest income (a) | 791 |  |  | 1,496 |  |  | 856 |  |  | 2,004 |  |  | 4,523 |  |  | (47 | ) | % | (83 | ) | %
Noninterest expense (b) | 4,681 |  |  | (4,144 | ) |  | 5,474 |  |  | 6,271 |  |  | 6,360 |  |  | NM |  |  | (26 | ) | %
Income before income taxes | $ | 7,804 |  |  | $ | 17,549 |  |  | $ | 8,892 |  |  | $ | 8,790 |  |  | $ | 14,377 |  |  | (56 | ) | % | (46 | ) | %
Average Balance Sheet (millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans | $ | 935 |  |  | $ | 1,011 |  |  | $ | 1,087 |  |  | $ | 1,161 |  |  | $ | 1,272 |  |  | (8 | ) | % | (26 | ) | %
Other assets | 66 |  |  | 77 |  |  | 88 |  |  | 98 |  |  | 100 |  |  | (14 | ) | % | (34 | ) | %
Total assets | 1,001 |  |  | 1,088 |  |  | 1,175 |  |  | 1,259 |  |  | 1,372 |  |  | (8 | ) | % | (27 | ) | %
Key Statistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets (c) | 2.33 | % |  | 4.87 | % |  | 2.31 | % |  | 2.09 | % |  | 3.13 | % |  |  |  |  |
Return on allocated equity (c) (d) | 31.56 | % |  | 64.04 | % |  | 25.49 | % |  | 22.06 | % |  | 28.23 | % |  |  |  |  |
Fee income to total revenue (c) | 11.28 | % |  | 17.33 | % |  | 8.63 | % |  | 15.94 | % |  | 29.12 | % |  |  |  |  |
Efficiency ratio (c) | 66.75 | % |  | NM |  |  | 55.16 | % |  | 49.88 | % |  | 40.95 | % |  |  |  |  |
Net interest margin (e) | 2.47 | % |  | 2.65 | % |  | 3.11 | % |  | 3.35 | % |  | 3.19 | % |  |  |  |  |
Net charge-offs/(recoveries) | $ | (2,474 | ) |  | $ | (2,679 | ) |  | $ | (1,027 | ) |  | $ | (1,062 | ) |  | $ | (2,190 | ) |  | 8 |  | % | (13 | ) | %

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

(a) | 2Q19 and 3Q18 include $1.1 million and $3.8 million, respectively, of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.

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

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

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

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

17

FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
(Dollars in thousands) |  | 3Q19 |  | 2Q19 |  | 1Q19 |  | 4Q18 |  | 3Q18 |  | 2Q19 |  | 3Q18
Allowance for Loan Losses Walk-Forward |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning reserve |  | $ | 192,749 |  |  | $ | 184,911 |  |  | $ | 180,424 |  |  | $ | 185,959 |  |  | $ | 185,462 |  |  | 4% |  | 4%
Provision/(provision credit) for loan losses |  | 15,000 |  |  | 13,000 |  |  | 9,000 |  |  | 6,000 |  |  | 2,000 |  |  | NM |  | NM
Charge-offs |  | (24,337 | ) |  | (12,223 | ) |  | (10,527 | ) |  | (17,824 | ) |  | (9,482 | ) |  | (99)% |  | NM
Recoveries |  | 9,737 |  |  | 7,061 |  |  | 6,014 |  |  | 6,289 |  |  | 7,979 |  |  | 38% |  | 22%
Ending balance |  | $ | 193,149 |  |  | $ | 192,749 |  |  | $ | 184,911 |  |  | $ | 180,424 |  |  | $ | 185,959 |  |  | * |  | 4%
Reserve for unfunded commitments |  | 6,890 |  |  | 7,524 |  |  | 8,014 |  |  | 7,618 |  |  | 7,581 |  |  | (8)% |  | (9)%
Total allowance for loan losses plus reserve for unfunded commitments |  | $ | 200,039 |  |  | $ | 200,273 |  |  | $ | 192,925 |  |  | $ | 188,042 |  |  | $ | 193,540 |  |  | * |  | 3%
Allowance for Loan Losses (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  | $ | 174,246 |  |  | $ | 170,849 |  |  | $ | 160,914 |  |  | $ | 153,015 |  |  | $ | 157,126 |  |  | 2% |  | 11%
Non-Strategic |  | 18,903 |  |  | 21,900 |  |  | 23,997 |  |  | 27,409 |  |  | 28,833 |  |  | (14)% |  | (34)%
Total allowance for loan losses |  | $ | 193,149 |  |  | $ | 192,749 |  |  | $ | 184,911 |  |  | $ | 180,424 |  |  | $ | 185,959 |  |  | * |  | 4%
Nonperforming Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans (b) |  | $ | 118,506 |  |  | $ | 145,265 |  |  | $ | 115,977 |  |  | $ | 79,339 |  |  | $ | 76,145 |  |  | (18)% |  | 56%
OREO |  | 13,408 |  |  | 13,251 |  |  | 16,698 |  |  | 18,535 |  |  | 20,571 |  |  | 1% |  | (35)%
Total Regional Banking |  | $ | 131,914 |  |  | $ | 158,516 |  |  | $ | 132,675 |  |  | $ | 97,874 |  |  | $ | 96,716 |  |  | (17)% |  | 36%
Non-Strategic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 52,346 |  |  | $ | 57,654 |  |  | $ | 63,960 |  |  | $ | 66,703 |  |  | $ | 68,485 |  |  | (9)% |  | (24)%
Nonperforming loans held-for-sale after fair value adjustments |  | 4,199 |  |  | 4,514 |  |  | 5,219 |  |  | 5,328 |  |  | 5,675 |  |  | (7)% |  | (26)%
OREO |  | 4,408 |  |  | 3,342 |  |  | 3,978 |  |  | 3,852 |  |  | 5,155 |  |  | 32% |  | (14)%
Total Non-Strategic |  | $ | 60,953 |  |  | $ | 65,510 |  |  | $ | 73,157 |  |  | $ | 75,883 |  |  | $ | 79,315 |  |  | (7)% |  | (23)%
Corporate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 1,643 |  |  | $ | 1,667 |  |  | $ | 1,687 |  |  | $ | 1,707 |  |  | $ | 1,727 |  |  | (1)% |  | (5)%
Total nonperforming assets |  | $ | 194,510 |  |  | $ | 225,693 |  |  | $ | 207,519 |  |  | $ | 175,464 |  |  | $ | 177,758 |  |  | (14)% |  | 9%
Net Charge-Offs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regional Banking |  | $ | 17,074 |  |  | $ | 7,841 |  |  | $ | 5,540 |  |  | $ | 12,597 |  |  | $ | 3,693 |  |  | NM |  | NM
Non-Strategic |  | (2,474 | ) |  | (2,679 | ) |  | (1,027 | ) |  | (1,062 | ) |  | (2,190 | ) |  | 8% |  | (13)%
Total net charge-offs/(recoveries) |  | $ | 14,600 |  |  | $ | 5,162 |  |  | $ | 4,513 |  |  | $ | 11,535 |  |  | $ | 1,503 |  |  | NM |  | NM
Consolidated Key Ratios (c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30+ Delinq. % (d) |  | 0.23 |  | % |  |  | 0.20 |  | % |  |  | 0.23 |  | % |  |  | 0.27 |  | % |  |  | 0.35 |  | % |  |  |  |  |
NPL % (e) |  | 0.55 |  |  |  | 0.69 |  |  |  | 0.65 |  |  |  | 0.54 |  |  |  | 0.54 |  |  |  |  |  |
NPA % |  | 0.61 |  |  |  | 0.74 |  |  |  | 0.72 |  |  |  | 0.62 |  |  |  | 0.63 |  |  |  |  |  |
Net charge-offs % (f) |  | 0.19 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.17 |  |  |  | 0.02 |  |  |  |  |  |
Allowance / loans % |  | 0.62 |  |  |  | 0.65 |  |  |  | 0.66 |  |  |  | 0.66 |  |  |  | 0.68 |  |  |  |  |  |
Allowance / NPL |  | 1.12 |  | x |  |  | 0.94 |  | x |  |  | 1.02 |  | x |  |  | 1.22 |  | x |  |  | 1.27 |  | x |  |  |  |  |
Allowance / NPA |  | 1.01 |  | x |  |  | 0.87 |  | x |  |  | 0.91 |  | x |  |  | 1.06 |  | x |  |  | 1.08 |  | x |  |  |  |  |
Allowance / net charge-offs |  | 3.33 |  | x |  |  | 9.31 |  | x |  |  | 10.10 |  | x |  |  | 3.94 |  | x |  |  | 31.20 |  | x |  |  |  |  |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans past due 90 days or more and still accruing (g) |  | $ | 27,182 |  |  | $ | 28,663 |  |  | $ | 30,896 |  |  | $ | 39,992 |  |  | $ | 49,352 |  |  | (5)% |  | (45)%
Guaranteed portion (g) |  | 6,028 |  |  | 5,628 |  |  | 5,725 |  |  | 7,237 |  |  | 7,772 |  |  | 7% |  | (22)%
Period-end loans, net of unearned income (millions) |  | 31,261 |  |  | 29,713 |  |  | 27,990 |  |  | 27,536 |  |  | 27,350 |  |  | 5% |  | 14%
30+ delinquencies (thousands) |  | $ | 70,675 |  |  | $ | 58,861 |  |  | $ | 63,693 |  |  | $ | 75,164 |  |  | $ | 95,092 |  |  | 20% |  | (26)%

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

(a) | In 2Q19, the HBF portfolio was retrospectively reclassed through 2Q18 from the Regional Banking segment to the Non-Strategic segment.

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

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

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

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

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

(g) | Includes loans held-for-sale.

18

FHN ASSET QUALITY: CONSOLIDATED
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
|  | 3Q19 |  | 2Q19 |  | 1Q19 |  | 4Q18 |  | 3Q18 |  | 2Q19 |  | 3Q18
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 20,294 |  |  |  | $ | 19,054 |  |  |  | $ | 17,176 |  |  |  | $ | 16,515 |  |  |  | $ | 16,044 |  |  |  | 7% |  | 26%
30+ Delinq. % (b) (c) |  | 0.11 |  | % |  | 0.05 |  | % |  | 0.07 |  | % |  | 0.06 |  | % |  | 0.15 |  | % |  |  |  |
NPL % (d) |  | 0.38 |  |  |  | 0.56 |  |  |  | 0.44 |  |  |  | 0.24 |  |  |  | 0.26 |  |  |  |  |  |
Charge-offs % (qtr. annualized) (e) |  | 0.32 |  |  |  | 0.14 |  |  |  | 0.06 |  |  |  | 0.20 |  |  |  | 0.01 |  |  |  |  |  |
Allowance / loans % |  | 0.56 |  | % |  | 0.61 |  | % |  | 0.60 |  | % |  | 0.60 |  | % |  | 0.63 |  | % |  |  |  |
Allowance / net charge-offs |  | 1.87 |  | x |  | 4.77 |  | x |  | 11.26 |  | x |  | 3.06 |  | x |  | 74.66 |  | x |  |  |  |
Commercial Real Estate (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 4,229 |  |  |  | $ | 3,861 |  |  |  | $ | 3,947 |  |  |  | $ | 4,031 |  |  |  | $ | 4,237 |  |  |  | 10% |  | *
30+ Delinq. % (b) (f) |  | 0.04 |  | % |  | 0.07 |  | % |  | 0.04 |  | % |  | 0.06 |  | % |  | 0.20 |  | % |  |  |  |
NPL % |  | 0.05 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.02 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.02 |  |  |  | 0.02 |  |  |  | 0.04 |  |  |  | 0.05 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.84 |  | % |  | 0.85 |  | % |  | 0.87 |  | % |  | 0.78 |  | % |  | 0.80 |  | % |  |  |  |
Allowance / net charge-offs |  | 47.70 |  |  |  | 39.25 |  | x |  | 22.50 |  | x |  | 15.45 |  | x |  | NM |  |  |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 6,063 |  |  |  | $ | 6,110 |  |  |  | $ | 6,152 |  |  |  | $ | 6,250 |  |  |  | $ | 6,301 |  |  |  | (1)% |  | (4)%
30+ Delinq. % (b) |  | 0.59 |  | % |  | 0.62 |  | % |  | 0.66 |  | % |  | 0.74 |  | % |  | 0.73 |  | % |  |  |  |
NPL % |  | 1.31 |  |  |  | 1.25 |  |  |  | 1.34 |  |  |  | 1.32 |  |  |  | 1.27 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.36 |  | % |  | 0.37 |  | % |  | 0.39 |  | % |  | 0.42 |  | % |  | 0.46 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 182 |  |  |  | $ | 193 |  |  |  | $ | 209 |  |  |  | $ | 222 |  |  |  | $ | 237 |  |  |  | (6)% |  | (23)%
30+ Delinq. % (b) (g) |  | 3.83 |  | % |  | 2.22 |  | % |  | 1.95 |  | % |  | 3.21 |  | % |  | 3.56 |  | % |  |  |  |
NPL % |  | 7.83 |  |  |  | 9.28 |  |  |  | 10.01 |  |  |  | 9.76 |  |  |  | 9.41 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 4.84 |  | % |  | 4.49 |  | % |  | 4.82 |  | % |  | 4.95 |  | % |  | 4.68 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Credit Card and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 493 |  |  |  | $ | 495 |  |  |  | $ | 506 |  |  |  | $ | 518 |  |  |  | $ | 531 |  |  |  | * |  | (7)%
30+ Delinq. % (b) |  | 0.94 |  | % |  | 1.06 |  | % |  | 1.20 |  | % |  | 1.63 |  | % |  | 1.64 |  | % |  |  |  |
NPL % |  | 0.07 |  |  |  | 0.09 |  |  |  | 0.09 |  |  |  | 0.12 |  |  |  | 0.13 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 2.10 |  |  |  | 2.17 |  |  |  | 2.44 |  |  |  | 3.32 |  |  |  | 3.32 |  |  |  |  |  |
Allowance / loans % |  | 2.58 |  | % |  | 2.46 |  | % |  | 2.50 |  | % |  | 2.46 |  | % |  | 2.21 |  | % |  |  |  |
Allowance / net charge-offs |  | 1.21 |  | x |  | 1.13 |  | x |  | 1.01 |  | x |  | 0.73 |  | x |  | 0.66 |  | x |  |  |  |

NM - Not meaningful

(a) | In 3Q19, FHN reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses is immaterial. No adjustments were made to prior periods as the impact of the reclassification, including the effect on the allowance for loan losses was deemed to be immaterial in all periods.

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

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

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

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

(f) | 3Q18 delinquencies were primarily driven by two credits.

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

19

FHN ASSET QUALITY: REGIONAL BANKING
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
|  | 3Q19 |  | 2Q19 |  | 1Q19 |  | 4Q18 |  | 3Q18 |  | 2Q19 |  | 3Q18
Total Regional Banking (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 30,345 |  |  |  | $ | 28,711 |  |  |  | $ | 26,898 |  |  |  | $ | 26,385 |  |  |  | $ | 26,082 |  |  |  | 6% |  | 16%
30+ Delinq. % (c) (d) |  | 0.18 |  | % |  | 0.15 |  | % |  | 0.17 |  | % |  | 0.19 |  | % |  | 0.26 |  | % |  |  |  |
NPL % (e) |  | 0.39 |  |  |  | 0.51 |  |  |  | 0.43 |  |  |  | 0.30 |  |  |  | 0.29 |  |  |  |  |  |
Charge-offs % (qtr. annualized) (f) |  | 0.23 |  |  |  | 0.11 |  |  |  | 0.09 |  |  |  | 0.19 |  |  |  | 0.06 |  |  |  |  |  |
Allowance / loans % |  | 0.57 |  | % |  | 0.60 |  | % |  | 0.60 |  | % |  | 0.58 |  | % |  | 0.60 |  | % |  |  |  |
Allowance / net charge-offs |  | 2.57 |  | x |  | 5.43 |  | x |  | 7.16 |  | x |  | 3.06 |  | x |  | 10.73 |  | x |  |  |  |
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I (a) (b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 19,962 |  |  |  | $ | 18,710 |  |  |  | $ | 16,812 |  |  |  | $ | 16,149 |  |  |  | $ | 15,671 |  |  |  | 7% |  | 27%
30+ Delinq. % (c) (d) |  | 0.11 |  | % |  | 0.05 |  | % |  | 0.06 |  | % |  | 0.06 |  | % |  | 0.15 |  | % |  |  |  |
NPL % (e) |  | 0.37 |  |  |  | 0.56 |  |  |  | 0.43 |  |  |  | 0.23 |  |  |  | 0.25 |  |  |  |  |  |
Charge-offs % (qtr. annualized) (f) |  | 0.33 |  |  |  | 0.14 |  |  |  | 0.06 |  |  |  | 0.21 |  |  |  | 0.01 |  |  |  |  |  |
Allowance / loans % |  | 0.57 |  | % |  | 0.61 |  | % |  | 0.61 |  | % |  | 0.60 |  | % |  | 0.63 |  | % |  |  |  |
Allowance / net charge-offs |  | 1.87 |  | x |  | 4.73 |  | x |  | 10.98 |  | x |  | 3.01 |  | x |  | 71.90 |  |  |  |  |  |
Commercial Real Estate (a) (b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 4,172 |  |  |  | $ | 3,787 |  |  |  | $ | 3,867 |  |  |  | $ | 3,955 |  |  |  | $ | 4,120 |  |  |  | 10% |  | 1%
30+ Delinq. % (c) (g) |  | 0.04 |  | % |  | 0.07 |  | % |  | 0.04 |  | % |  | 0.06 |  | % |  | 0.21 |  | % |  |  |  |
NPL % |  | 0.05 |  |  |  | 0.07 |  |  |  | 0.07 |  |  |  | 0.08 |  |  |  | 0.02 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 0.02 |  |  |  | 0.02 |  |  |  | 0.04 |  |  |  | 0.05 |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.79 |  | % |  | 0.77 |  | % |  | 0.80 |  | % |  | 0.71 |  | % |  | 0.73 |  | % |  |  |  |
Allowance / net charge-offs |  | 43.95 |  |  |  | 34.79 |  |  |  | 20.16 |  |  |  | 13.63 |  |  |  | NM |  |  |  |  |  |
Consumer Real Estate (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 5,759 |  |  |  | $ | 5,773 |  |  |  | $ | 5,780 |  |  |  | $ | 5,845 |  |  |  | $ | 5,859 |  |  |  | * |  | (2)%
30+ Delinq. % (c) |  | 0.48 |  | % |  | 0.50 |  | % |  | 0.52 |  | % |  | 0.58 |  | % |  | 0.56 |  | % |  |  |  |
NPL % |  | 0.74 |  |  |  | 0.66 |  |  |  | 0.71 |  |  |  | 0.67 |  |  |  | 0.61 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | 0.04 |  |  |  | 0.07 |  |  |  | 0.03 |  |  |  |  |  |
Allowance / loans % |  | 0.26 |  | % |  | 0.25 |  | % |  | 0.26 |  | % |  | 0.25 |  | % |  | 0.28 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | 6.17 |  | x |  | 3.38 |  |  |  | 10.63 |  |  |  |  |  |
Credit Card, Permanent Mortgage, and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 452 |  |  |  | $ | 441 |  |  |  | $ | 439 |  |  |  | $ | 436 |  |  |  | $ | 432 |  |  |  | 2% |  | 5%
30+ Delinq. % (c) |  | 0.69 |  | % |  | 0.72 |  | % |  | 0.74 |  | % |  | 0.95 |  | % |  | 0.80 |  | % |  |  |  |
NPL % |  | 0.05 |  |  |  | 0.06 |  |  |  | 0.08 |  |  |  | 0.09 |  |  |  | 0.08 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 2.00 |  |  |  | 1.82 |  |  |  | 2.08 |  |  |  | 2.55 |  |  |  | 2.98 |  |  |  |  |  |
Allowance / loans % |  | 2.82 |  | % |  | 2.76 |  | % |  | 2.87 |  | % |  | 2.90 |  | % |  | 2.64 |  | % |  |  |  |
Allowance / net charge-offs |  | 1.41 |  | x |  | 1.52 |  | x |  | 1.38 |  | x |  | 1.13 |  | x |  | 0.90 |  | x |  |  |  |
ASSET QUALITY: CORPORATE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 34 |  |  |  | $ | 35 |  |  |  | $ | 38 |  |  |  | $ | 39 |  |  |  | $ | 42 |  |  |  | (3)% |  | (19)%
30+ Delinq. % (c) |  | 5.00 |  | % |  | 4.03 |  | % |  | 4.54 |  | % |  | 4.37 |  | % |  | 4.21 |  | % |  |  |  |
NPL % |  | 4.90 |  |  |  | 4.79 |  |  |  | 4.49 |  |  |  | 4.35 |  |  |  | 4.12 |  |  |  |  |  |
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 |  |  |  |  |  |

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

(a) | In 2Q19, the HBF portfolio was retrospectively reclassed through 2Q18 from the Regional Banking segment to the Non-Strategic segment.

(b) | In 3Q19, FHN reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses is immaterial. No adjustments were made to prior periods as the impact of the reclassification, including the effect on the allowance for loan losses was deemed to be immaterial in all periods.

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

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

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

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

(g) | 3Q18 delinquencies were primarily driven by two credits.

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FHN ASSET QUALITY: NON-STRATEGIC
Quarterly, Unaudited

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3Q19 Changes vs.
|  | 3Q19 |  | 2Q19 |  | 1Q19 |  | 4Q18 |  | 3Q18 |  | 2Q19 |  | 3Q18
Total Non-Strategic (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 882 |  |  |  | $ | 967 |  |  |  | $ | 1,054 |  |  |  | $ | 1,112 |  |  |  | $ | 1,226 |  |  |  | (9)% |  | (28)%
30+ Delinq. % (b) |  | 1.67 |  | % |  | 1.42 |  | % |  | 1.63 |  | % |  | 2.15 |  | % |  | 2.08 |  | % |  |  |  |
NPL % |  | 5.93 |  |  |  | 5.96 |  |  |  | 6.06 |  |  |  | 6.00 |  |  |  | 5.59 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 2.14 |  | % |  | 2.27 |  | % |  | 2.27 |  | % |  | 2.47 |  | % |  | 2.35 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Key Portfolio Details |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 388 |  |  |  | $ | 418 |  |  |  | $ | 444 |  |  |  | $ | 441 |  |  |  | $ | 490 |  |  |  | (7)% |  | (21)%
30+ Delinq. % (b) |  | — |  | % |  | — |  | % |  | 0.38 |  | % |  | 0.39 |  | % |  | — |  | % |  |  |  |
NPL % |  | 0.70 |  |  |  | 0.66 |  |  |  | 0.64 |  |  |  | 0.65 |  |  |  | 0.60 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | — |  |  |  | 0.02 |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 0.77 |  | % |  | 1.20 |  | % |  | 1.10 |  | % |  | 0.99 |  | % |  | 1.02 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | 56.57 |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Consumer Real Estate (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 304 |  |  |  | $ | 337 |  |  |  | $ | 372 |  |  |  | $ | 405 |  |  |  | $ | 442 |  |  |  | (10)% |  | (31)%
30+ Delinq. % (b) |  | 2.62 |  | % |  | 2.60 |  | % |  | 2.77 |  | % |  | 3.07 |  | % |  | 3.06 |  | % |  |  |  |
NPL % |  | 12.14 |  |  |  | 11.40 |  |  |  | 11.25 |  |  |  | 10.76 |  |  |  | 10.08 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 2.33 |  | % |  | 2.44 |  | % |  | 2.41 |  | % |  | 2.95 |  | % |  | 2.81 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Permanent Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 145 |  |  |  | $ | 155 |  |  |  | $ | 168 |  |  |  | $ | 179 |  |  |  | $ | 191 |  |  |  | (6)% |  | (24)%
30+ Delinq. % (b) (c) |  | 3.50 |  | % |  | 1.67 |  | % |  | 1.14 |  | % |  | 2.87 |  | % |  | 3.31 |  | % |  |  |  |
NPL % |  | 8.56 |  |  |  | 10.36 |  |  |  | 11.29 |  |  |  | 10.97 |  |  |  | 10.60 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Allowance / loans % |  | 6.05 |  | % |  | 5.57 |  | % |  | 5.96 |  | % |  | 6.10 |  | % |  | 5.76 |  | % |  |  |  |
Allowance / net charge-offs |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  | NM |  |  |  |  |  |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Period-end loans ($ millions) |  | $ | 45 |  |  |  | $ | 57 |  |  |  | $ | 70 |  |  |  | $ | 87 |  |  |  | $ | 103 |  |  |  | (21)% |  | (56)%
30+ Delinq. % (b) |  | 3.78 |  | % |  | 4.21 |  | % |  | 4.61 |  | % |  | 5.35 |  | % |  | 5.47 |  | % |  |  |  |
NPL % |  | 0.72 |  |  |  | 0.72 |  |  |  | 0.56 |  |  |  | 0.69 |  |  |  | 0.66 |  |  |  |  |  |
Charge-offs % (qtr. annualized) |  | 2.84 |  |  |  | 4.41 |  |  |  | 4.35 |  |  |  | 6.77 |  |  |  | 4.47 |  |  |  |  |  |
Allowance / loans % |  | 0.09 |  | % |  | 0.09 |  | % |  | 0.20 |  | % |  | 0.15 |  | % |  | 0.37 |  | % |  |  |  |
Allowance / net charge-offs |  | 0.03 |  | x |  | 0.02 |  | x |  | 0.04 |  | x |  | 0.02 |  |  |  | 0.08 |  |  |  |  |  |

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

(a) | In 2Q19, the HBF portfolio was retrospectively reclassed through 2Q18 from the Regional Banking segment to the Non-Strategic segment.

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

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

21

FHN NON-GAAP TO GAAP RECONCILIATION
Quarterly, Unaudited

(Dollars and shares in thousands, except per share data) | 3Q19 |  |  | 2Q19 |  |  | 1Q19 |  |  | 4Q18 |  |  | 3Q18 |  |
Tangible Common Equity (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |
(A) Total equity (GAAP) | $ | 4,996,043 |  |  | $ | 4,926,081 |  |  | $ | 4,846,521 |  |  | $ | 4,785,380 |  |  | $ | 4,741,931 |  |
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 | $ | 4,604,988 |  |  | $ | 4,535,026 |  |  | $ | 4,455,466 |  |  | $ | 4,394,325 |  |  | $ | 4,350,876 |  |
Less: Intangible assets (GAAP) (b) | 1,569,193 |  |  | 1,575,399 |  |  | 1,581,605 |  |  | 1,587,821 |  |  | 1,571,317 |  |
(C) Tangible common equity (Non-GAAP) | $ | 3,035,795 |  |  | $ | 2,959,627 |  |  | $ | 2,873,861 |  |  | $ | 2,806,504 |  |  | $ | 2,779,559 |  |
Tangible Assets (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(D) Total assets (GAAP) | $ | 43,717,684 |  |  | $ | 42,171,770 |  |  | $ | 41,099,003 |  |  | $ | 40,832,258 |  |  | $ | 40,635,924 |  |
Less: Intangible assets (GAAP) (b) | 1,569,193 |  |  | 1,575,399 |  |  | 1,581,605 |  |  | 1,587,821 |  |  | 1,571,317 |  |
(E) Tangible assets (Non-GAAP) | $ | 42,148,491 |  |  | $ | 40,596,371 |  |  | $ | 39,517,398 |  |  | $ | 39,244,437 |  |  | $ | 39,064,607 |  |
Average Tangible Common Equity (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(F) Average total equity (GAAP) | $ | 4,962,341 |  |  | $ | 4,869,161 |  |  | $ | 4,809,235 |  |  | $ | 4,730,698 |  |  | $ | 4,611,302 |  |
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 | $ | 4,571,286 |  |  | $ | 4,478,106 |  |  | $ | 4,418,180 |  |  | $ | 4,339,643 |  |  | $ | 4,220,247 |  |
Less: Average intangible assets (GAAP) (b) | 1,572,312 |  |  | 1,578,505 |  |  | 1,584,694 |  |  | 1,569,533 |  |  | 1,572,886 |  |
(H) Average tangible common equity (Non-GAAP) | $ | 2,998,974 |  |  | $ | 2,899,601 |  |  | $ | 2,833,486 |  |  | $ | 2,770,110 |  |  | $ | 2,647,361 |  |
Annualized Net Income/(loss) Available to Common Shareholders |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(I) Net income /(loss) available to common shareholders (annualized) (GAAP) | $ | 434,469 |  |  | $ | 438,562 |  |  | $ | 401,642 |  |  | $ | 382,238 |  |  | $ | 1,072,318 |  |
Period-end Shares Outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(J) Period-end shares outstanding | 311,180 |  |  | 312,478 |  |  | 315,361 |  |  | 318,573 |  |  | 323,943 |  |
Ratios |  |  |  |  |  |  |  |  |  |
(I)/(G) Return on average common equity (“ROCE”) (GAAP) | 9.50 |  | % | 9.79 |  | % | 9.09 |  | % | 8.81 |  | % | 25.41 |  | %
(I)/(H) Return on average tangible common equity (“ROTCE”) (Non-GAAP) | 14.49 |  | % | 15.12 |  | % | 14.17 |  | % | 13.80 |  | % | 40.51 |  | %
(A)/(D) Total equity to total assets (GAAP) | 11.43 |  | % | 11.68 |  | % | 11.79 |  | % | 11.72 |  | % | 11.67 |  | %
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP) | 7.20 |  | % | 7.29 |  | % | 7.27 |  | % | 7.15 |  | % | 7.12 |  | %
(B)/(J) Book value per common share (GAAP) | $ | 14.80 |  |  | $ | 14.51 |  |  | $ | 14.13 |  |  | $ | 13.79 |  |  | $ | 13.43 |  |
(C)/(J) Tangible book value per common share (Non-GAAP) | $ | 9.76 |  |  | $ | 9.47 |  |  | $ | 9.11 |  |  | $ | 8.81 |  |  | $ | 8.58 |  |

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

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

22

FHN GLOSSARY OF TERMS

Average Assets for Leverage: The amount of assets a company uses to calculate the leverage ratio, which includes average total assets less disallowed portions of goodwill, other intangibles, and deferred tax assets, as well as certain other regulatory adjustments made to tier 1 capital.
Common Equity Tier 1 Ratio: Ratio consisting of common equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, less disallowed portions of goodwill, other intangibles, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.
Core Businesses: Management considers regional banking, fixed income, and corporate as FHN’s core businesses. Non-strategic has legacy assets and operations that are being wound down.
Fully Taxable Equivalent (“FTE”): Reflects the amount of tax-exempt income adjusted to a level that would yield the same after-tax income had that income been subject to taxation.
Market-Indexed Deposits: Deposits with pricing tied to an index not administered by FHN. For FHN these are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.
Risk-Weighted Assets: A regulatory risk-based calculation that takes into account the broad differences in risks among a banking organization’s assets and off-balance sheet financial instruments.
Tier 1 Capital Ratio: Ratio consisting of shareholders’ equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, plus qualifying portions of noncontrolling interests, less disallowed portions of goodwill, other intangible assets, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

Key Ratios

Return on Average Assets: Ratio is annualized net income to average total assets.
Return on Average Common Equity: Ratio is annualized net income available to common shareholders to average common equity.
Return on Average Tangible Common Equity: Ratio is annualized net income available to common shareholders to average tangible common equity.
Fee Income to Total Revenue: Ratio is fee income excluding securities gains/(losses) to total revenue excluding securities gains/(losses).
Efficiency Ratio: Ratio is noninterest expense to total revenue excluding securities gains/(losses).
Leverage Ratio: Ratio is tier 1 capital to average assets for leverage.

Asset Quality - Consolidated Key Ratios

NPL %: Ratio is nonperforming loans in the loan portfolio to total period-end loans.
NPA %: Ratio is nonperforming assets related to the loan portfolio to total period-end loans plus foreclosed real estate and other assets.
Net charge-offs %: Ratio is annualized net charge-offs to total average loans.
Allowance / loans: Ratio is allowance for loan losses to total period-end loans.
Allowance / NPL: Ratio is allowance for loan losses to nonperforming loans in the loan portfolio.
Allowance / NPA: Ratio is allowance for loan losses to nonperforming assets related to the loan portfolio.
Allowance / charge-offs: Ratio is allowance for loan losses to annualized net charge-offs.

23