Business Segment Information

FHN has four business segments: regional banking, fixed income, corporate, and non-strategic. The regional banking segment offers financial products and services, including traditional lending and deposit taking, to consumer and commercial customers in Tennessee, North Carolina, South Carolina, Florida and other selected markets. Regional banking also provides investments, wealth management, financial planning, trust services and asset management, mortgage banking, credit card, and cash management. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking related services to other financial institutions nationally. The fixed income segment consists of fixed income securities sales, trading, underwriting, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory services, and derivative sales. The corporate segment consists of unallocated corporate expenses, expense on subordinated debt issuances, bank-owned life insurance, unallocated interest income associated with excess equity, net impact of raising incremental capital, revenue and expense associated with deferred compensation plans, funds management, tax credit investment activities, derivative valuation adjustments related to prior sales of Visa Class B shares, gain/(loss) on extinguishment of debt, acquisition-and integration-related costs and various charges related to restructuring, repositioning, and efficiency efforts. The non-strategic segment consists of run-off consumer lending activities, legacy (pre-2009) mortgage banking elements, and the associated ancillary revenues and expenses related to these businesses. Non-strategic also includes the wind-down trust preferred loan portfolio and exited businesses.

Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses and equity among segments which could change historical segment results. Business segment revenue, expense, asset, and equity levels reflect those which are specifically identifiable or which are allocated based on an internal allocation method. Because the allocations are based on internally developed assignments and allocations, to an extent they are subjective. Generally, all assignments and allocations have been consistently applied for all periods presented. The following table reflects the amounts of consolidated revenue, expense, tax, and average assets for each segment for the three months ended March 31:



	Three Months Ended March 31
(Dollars in thousands)	2019		2018
Consolidated
Net interest income	$	294,508	$	301,173
Provision/(provision credit) for loan losses	9,000		(1,000		)
Noninterest income	141,045		136,017
Noninterest expense	296,090		313,265
Income/(loss) before income taxes	130,463		124,925
Provision/(benefit) for income taxes	27,058		29,931
Net income/(loss)	$	103,405	$	94,994
Average assets	$	40,883,192	$	40,350,724



	Three Months Ended March 31
(Dollars in thousands)	2019			2018
Regional Banking
Net interest income	$	287,157		$	293,194
Provision/(provision credit) for loan losses	13,958			4,458
Noninterest income	72,117			79,963
Noninterest expense	199,959			201,749
Income/(loss) before income taxes	145,357			166,950
Provision/(benefit) for income taxes	33,693			39,340
Net income/(loss)	$	111,664		$	127,610
Average assets	$	28,889,492		$	28,171,416
Fixed Income
Net interest income	$	7,322		$	8,475
Noninterest income	53,807			45,605
Noninterest expense	51,227			49,931
Income/(loss) before income taxes	9,902			4,149
Provision/(benefit) for income taxes	2,283			896
Net income/(loss)	$	7,619		$	3,253
Average assets	$	2,849,939		$	3,479,425
Corporate
Net interest income/(expense)	$	(7,853	)	$	(16,184	)
Noninterest income	13,352			9,316
Noninterest expense	40,351			53,329
Income/(loss) before income taxes	(34,852		)	(60,197		)
Provision/(benefit) for income taxes	(11,403		)	(13,771		)
Net income/(loss)	$	(23,449	)	$	(46,426	)
Average assets	$	8,050,162		$	7,115,661
Non-Strategic
Net interest income	$	7,882		$	15,688
Provision/(provision credit) for loan losses	(4,958		)	(5,458		)
Noninterest income	1,769			1,133
Noninterest expense	4,553			8,256
Income/(loss) before income taxes	10,056			14,023
Provision/(benefit) for income taxes	2,485			3,466
Net income/(loss)	$	7,571		$	10,557
Average assets	$	1,093,599		$	1,584,222

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

The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three months ended March 31, 2019 and 2018:



	Three months ended March 31, 2019
(Dollars in thousands)	Regional Banking		Fixed Income		Corporate			Non-Strategic			Consolidated
Noninterest income:
Fixed income (a)	$	17	$	53,732	$	—		$	—		$	53,749
Deposit transactions and cash management	30,005		3		1,563			50			31,621
Brokerage, management fees and commissions	12,629		—		—			4			12,633
Trust services and investment management	7,056		—		(30		)	—			7,026
Bankcard income	6,102		—		62			(149		)	6,015
BOLI (b)	—		—		4,402			—			4,402
Debt securities gains/(losses), net (b)	—		—		—			—			—
Equity securities gains/(losses), net (b)	—		—		31			—			31
All other income and commissions (c)	16,308		72		7,324			1,864			25,568
Total noninterest income	$	72,117	$	53,807	$	13,352		$	1,769		$	141,045


(a)	Includes $7.3 million of underwriting, portfolio advisory, and other noninterest income in scope of Accounting Standards Codification ("ASC") 606, "Revenue From Contracts With Customers."


(b)	Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total non-interest income.


(c)	Includes other service charges, ATM and interchange fees, electronic banking fees, and insurance commission in scope of ASC 606.



	Three months ended March 31, 2018
(Dollars in thousands)	Regional Banking		Fixed Income		Corporate			Non- Strategic		Consolidated
Noninterest income:
Fixed income (a)	$	81	$	45,425	$	—		$	—	$	45,506
Deposit transactions and cash management	34,722		3		1,209			50		35,984
Brokerage, management fees and commissions	13,483		—		—			—		13,483
Trust services and investment management	7,292		—		(15		)	—		7,277
Bankcard income	6,279		—		56			110		6,445
BOLI (b)	—		—		3,993			—		3,993
Debt securities gains/(losses), net (b)	—		—		52			—		52
Equity securities gains/(losses), net (b)	—		—		34			—		34
All other income and commissions (c) (d)	18,106		177		3,987			973		23,243
Total noninterest income	$	79,963	$	45,605	$	9,316		$	1,133	$	136,017

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


(a)	Includes $8.2 million of underwriting, portfolio advisory, and other noninterest income in scope of Accounting Standards Codification ("ASC") 606, "Revenue From Contracts With Customers."


(b)	Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total non-interest income.


(c)	Includes other service charges, ATM and interchange fees, electronic banking fees, and insurance commission in scope of ASC 606.


(d)	Corporate includes a $3.3 million gain on the sale of a building.