Acquisitions and Divestitures (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following schedule details acquired assets and liabilities and consideration paid, as well as adjustments to record the assets and liabilities at their estimated fair values as of November 30, 2017. These fair value measurements are based on third party and internal valuations.



	Capital Bank Financial Corporation
	As			Purchase Accounting/Fair
	Acquired			Value Adjustments (unaudited)								As recorded
(Dollars in thousands)	(unaudited)			2017				2018 (a)				by FHN
Assets:
Cash and cash equivalents	$	205,999		$	—			$	—			$	205,999
Trading securities	4,758			(4,758		)	(b)	—				—
Loans held-for-sale	—			134,003				(9,085		)		124,918
Securities available-for-sale	1,017,867			175,526				—				1,193,393
Securities held-to-maturity	177,549			(177,549		)		—				—
Loans	7,596,049			(320,372		)		867				7,276,544
Allowance for loan losses	(45,711		)	45,711				—				—
CBF Goodwill	231,292			(231,292		)		—				—
Other intangible assets	24,498			119,302				(2,593		)		141,207
Premises and equipment	196,298			37,054				(2,351		)		231,001
OREO	43,077			(9,149		)		(315		)		33,613
Other assets	617,232			41,320			(c)	(7,248		)	(c)	651,304
Total assets acquired	$	10,068,908		$	(190,204	)		$	(20,725	)		$	9,857,979

Liabilities:
Deposits	$	8,141,593		$	(849	)		$	(642	)		$	8,140,102
Securities sold under agreements to repurchase	26,664			—				—				26,664
Other short-term borrowings	390,391			—				—				390,391
Term borrowings	119,486			67,683				—				187,169
Other liabilities	59,995			4,291				2,908				67,194
Total liabilities assumed	8,738,129			71,125				2,266				8,811,520
Net assets acquired	$	1,330,779		$	(261,329	)		$	(22,991	)		1,046,459
Consideration paid:
Equity												(1,746,724		)
Cash												(469,609		)
Total consideration paid												(2,216,333		)
Goodwill												$	1,169,874


(a)	Amounts reflect adjustments made to provisional fair value estimates during the measurement period ending November 30, 2018. These adjustments were recorded in FHN's Consolidated Condensed Statement of Condition as of September 30, 2018 with a corresponding adjustment to goodwill.


(b)	Amount represents a conformity adjustment to align with FHN presentation.


(c)	Amount primarily relates to a net deferred tax asset recorded for the effects of the purchase accounting adjustments.

Merger And Integration Expense

Total CBF merger and integration expense recognized for the three and nine months ended September 30, 2018 and 2017 are presented in the table below:



	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in thousands)	2018		2017		2018		2017
Professional fees (a)	$	4,594	$	3,492	$	19,215	$	8,004
Employee compensation, incentives and benefits (b)	1,965		232		8,459		232
Contract employment and outsourcing (c)	599		351		3,702		351
Occupancy (d)	100		15		2,321		15
Miscellaneous expense (e)	1,384		130		6,522		234
All other expense (f)	1,548		2,771		41,833		2,786
Total	$	10,190	$	6,991	$	82,052	$	11,622

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

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

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

(e) Consists of fees for Operations services, communications and courier, equipment rentals, depreciation, 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 the integration, as well as other miscellaneous expenses.