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Business Segment Information
 6 Months Ended
Jun. 30, 2020
Segment Reporting, Measurement Disclosures [Abstract]  
Business Segment Information 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 the southeast U.S. 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, expenses associated with rebranding initiatives, and various charges related to restructuring, repositioning, and efficiency efforts. The non-strategic segment consists of run-off consumer lending activities, 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 and six months ended June 30:
 
 
Three Months Ended
June 30
 
Six Months Ended
June 30
(Dollars in thousands)
 
2020
 
2019
 
2020
 
2019
Consolidated
 
 
 
 
 
 
 
 
Net interest income
 
$
305,344

 
$
303,610

 
$
608,146

 
$
598,118

Provision/(provision credit) for loan losses (a)
 
110,000

 
13,000

 
255,000

 
22,000

Noninterest income
 
206,269

 
157,993

 
381,025

 
299,038

Noninterest expense
 
332,168

 
300,394

 
643,487

 
596,484

Income/(loss) before income taxes
 
69,445

 
148,209

 
90,684

 
278,672

Provision/(benefit) for income taxes
 
12,780

 
34,467

 
17,547

 
61,525

Net income/(loss)
 
$
56,665

 
$
113,742

 
$
73,137

 
$
217,147

Average assets
 
$
47,934,074

 
$
41,243,007

 
$
45,742,993

 
$
41,064,093

(a)
Increase in provision expense for the three and six months ended June 30, 2020 is primarily due to the economic forecast attributable to the COVID-19 pandemic.

















 
 
Three Months Ended
June 30
 
Six Months Ended
June 30
(Dollars in thousands)
 
2020
 
2019
 
2020
 
2019
Regional Banking
 
 
 
 
 
 
 
 
Net interest income
 
$
349,749

 
$
297,534

 
$
649,936

 
$
583,636

Provision/(provision credit) for loan losses (a)
 
108,311

 
17,776

 
253,752

 
31,218

Noninterest income
 
79,312

 
81,565

 
161,208

 
154,626

Noninterest expense
 
202,297

 
192,413

 
413,331

 
391,043

Income/(loss) before income taxes
 
118,453

 
168,910

 
144,061

 
316,001

Provision/(benefit) for income taxes
 
26,948

 
39,788

 
31,349

 
73,909

Net income/(loss)
 
$
91,505

 
$
129,122

 
$
112,712

 
$
242,092

Average assets
 
$
35,732,966

 
$
30,210,728

 
$
33,952,986

 
$
29,515,773

Fixed Income
 
 
 
 
 
 
 
 
Net interest income
 
$
13,545

 
$
6,171

 
$
24,459

 
$
13,503

Noninterest income
 
113,235

 
65,622

 
208,958

 
119,429

Noninterest expense
 
83,039

 
55,534

 
164,102

 
106,067

Income/(loss) before income taxes
 
43,741

 
16,259

 
69,315

 
26,865

Provision/(benefit) for income taxes
 
10,679

 
3,840

 
16,778

 
6,297

Net income/(loss)
 
$
33,062

 
$
12,419

 
$
52,537

 
$
20,568

Average assets
 
$
3,260,362

 
$
3,127,305

 
$
3,512,277

 
$
2,988,548

Corporate
 
 
 
 
 
 
 
 
Net interest income/(expense)
 
$
(63,493
)
 
$
(7,146
)
 
$
(76,852
)
 
$
(15,060
)
Noninterest income (b)
 
12,943

 
9,401

 
9,225

 
22,754

Noninterest expense (b) (c) (d)
 
43,218

 
56,873

 
58,667

 
98,652

Income/(loss) before income taxes
 
(93,768
)
 
(54,618
)
 
(126,294
)
 
(90,958
)
Provision/(benefit) for income taxes
 
(25,097
)
 
(13,525
)
 
(31,469
)
 
(25,296
)
Net income/(loss)
 
$
(68,671
)
 
$
(41,093
)
 
$
(94,825
)
 
$
(65,662
)
Average assets
 
$
8,168,307

 
$
6,827,937

 
$
7,476,249

 
$
7,439,591

Non-Strategic
 
 
 
 
 
 
 
 
Net interest income
 
$
5,543

 
$
7,051

 
$
10,603

 
$
16,039

Provision/(provision credit) for loan losses (a)
 
1,689

 
(4,776
)
 
1,248

 
(9,218
)
Noninterest income
 
779

 
1,405

 
1,634

 
2,229

Noninterest expense
 
3,614

 
(4,426
)
 
7,387

 
722

Income/(loss) before income taxes
 
1,019

 
17,658

 
3,602

 
26,764

Provision/(benefit) for income taxes
 
250

 
4,364

 
889

 
6,615

Net income/(loss)
 
$
769

 
$
13,294

 
$
2,713

 
$
20,149

Average assets
 
$
772,439

 
$
1,077,037

 
$
801,481

 
$
1,120,181

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Increase in provision expense for the three and six months ended June 30, 2020 is primarily due to the economic forecast attributable to the COVID-19 pandemic.
(b)
Balance for the six months ended June 30, 2020 includes a decrease due to fluctuations in deferred compensation income driven by equity market valuations and mirrored by changes in deferred compensation expense, which is included in employee compensation expense.
(c)
2020 and 2019 include acquisition-related expenses and restructuring-related costs associated with efficiency initiatives; refer to Note 2 - Acquisitions and Divestitures and Note 17 - Restructuring, Repositioning, and Efficiency for additional information.
(d)
Three and six months ended June 30, 2019 includes $9.1 million of asset impairments, professional fees, and other customer-contact and technology-related expenses associated with rebranding initiatives.






The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three months ended June 30, 2020 and 2019:
 
Three months ended June 30, 2020
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non-Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
81

 
$
112,340

 
$
—

 
$
—

 
$
112,421

Deposit transactions and cash management
29,541

 
—

 
1,204

 
42

 
30,787

Brokerage, management fees and commissions
13,800

 
—

 
—

 
—

 
13,800

Trust services and investment management
7,750

 
—

 
(17
)
 
—

 
7,733

Bankcard income
6,551

 
—

 
74

 
27

 
6,652

BOLI (b)
—

 
—

 
6,380

 
—

 
6,380

Debt securities gains/(losses), net (b)
—

 
—

 
—

 
—

 
—

Equity securities gains/(losses), net (b)
—

 
—

 
(1,493
)
 
—

 
(1,493
)
All other income and commissions (c)
21,589

 
895

 
6,795

 
710

 
29,989

     Total noninterest income
$
79,312

 
$
113,235

 
$
12,943

 
$
779

 
$
206,269

(a)
Includes $8.8 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 June 30, 2019
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non- Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
46

 
$
65,262

 
$
—

 
$
1,106

 
$
66,414

Deposit transactions and cash management
30,632

 
1

 
1,707

 
34

 
32,374

Brokerage, management fees and commissions
14,120

 
—

 
—

 
—

 
14,120

Trust services and investment management
7,902

 
—

 
(14
)
 
—

 
7,888

Bankcard income
6,597

 
—

 
60

 
(302
)
 
6,355

BOLI (b)
—

 
—

 
5,126

 
—

 
5,126

Debt securities gains/(losses), net (b)
—

 
—

 
(267
)
 
—

 
(267
)
Equity securities gains/(losses), net (b)
—

 
—

 
316

 
—

 
316

All other income and commissions (c)
22,268

 
359

 
2,473

 
567

 
25,667

     Total noninterest income
$
81,565

 
$
65,622

 
$
9,401

 
$
1,405

 
$
157,993

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Includes $7.1 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.









The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the six months ended June 30, 2020 and 2019:
 
Six Months Ended June 30, 2020
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non-Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
202

 
$
207,854

 
$
—

 
$
—

 
$
208,056

Deposit transactions and cash management
58,368

 
—

 
2,640

 
69

 
61,077

Brokerage, management fees and commissions
29,205

 
—

 
—

 
—

 
29,205

Trust services and investment management
14,963

 
—

 
(35
)
 
—

 
14,928

Bankcard income
13,703

 
—

 
143

 
59

 
13,905

BOLI (b)
—

 
—

 
10,969

 
—

 
10,969

Debt securities gains/(losses), net (b)
—

 
—

 
—

 
—

 
—

Equity securities gains/(losses), net (b)
—

 
—

 
(1,468
)
 
—

 
(1,468
)
All other income and commissions (c) (d)
44,767

 
1,104

 
(3,024
)
 
1,506

 
44,353

     Total noninterest income
$
161,208

 
$
208,958

 
$
9,225

 
$
1,634

 
$
381,025

(a)
Includes $18.1 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 balance includes negative deferred compensation income driven by equity market valuations.

 
Six Months Ended June 30, 2019
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non- Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
63

 
$
118,994

 
$
—

 
$
1,106

 
$
120,163

Deposit transactions and cash management
60,658

 
4

 
3,270

 
63

 
63,995

Brokerage, management fees and commissions
26,753

 
—

 
—

 
—

 
26,753

Trust services and investment management
14,958

 
—

 
(44
)
 
—

 
14,914

Bankcard income
13,640

 
—

 
122

 
(455
)
 
13,307

BOLI (b)
—

 
—

 
9,528

 
—

 
9,528

Debt securities gains/(losses), net (b)
—

 
—

 
(267
)
 
—

 
(267
)
Equity securities gains/(losses), net (b)
—

 
—

 
347

 
—

 
347

All other income and commissions (c)
38,554

 
431

 
9,798

 
1,515

 
50,298

     Total noninterest income
$
154,626

 
$
119,429

 
$
22,754

 
$
2,229

 
$
299,038

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Includes $14.4 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.