Loans

12 Months Ended

Dec. 31, 2011

Loans [Abstract]

Loans

Note 4 q Loans

The following table provides the balance of loans by portfolio segment as of December 31, 2011 and 2010:

(Dollars in thousands)	2011			2010
Commercial:
Commercial, financial, and industrial		$	8,014,927		$	7,338,155
Commercial real estate
Income CRE			1,257,497			1,406,646
Residential CRE			120,913			263,878
Retail:
Consumer real estate			5,291,364			5,617,619
Permanent mortgage			787,597			1,086,859
Credit card & other			284,051			311,924
Restricted real estate loans (a)			640,778			757,491
Loans, net of unearned income		$	16,397,127		$	16,782,572
Allowance for loan losses			384,351			664,799
Total net loans		$	16,012,776		$	16,117,773

(a) Balances as of December 31, 2011 and 2010 include $600.2 million and $701.8 million of consumer real estate loans and $40.6 million and $55.7 million of permanent mortgage loans, respectively.

Components of the Loan Portfolio

For purposes of this disclosure the loan portfolio was disaggregated into segments and then further disaggregated into classes for certain disclosures. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally determined based on the initial measurement attribute (i.e., amortized cost or purchased credit impaired), risk characteristics of the loan, and an entity's method for monitoring and assessing credit risk. Commercial loan portfolio segments include commercial, financial, and industrial ("C&I") and commercial real estate ("CRE"). Commercial classes within C&I include general C&I, loans to mortgage companies, and the trust preferred loans ("TRUPs")(i.e., loans to bank and insurance-related businesses) portfolio. Loans to mortgage companies includes commercial lines of credit to qualified mortgage companies exclusively for the temporary warehousing of eligible mortgage loans prior to the borrower's sale of those mortgage loans to third party investors. Commercial classes within commercial real estate include income CRE and residential CRE. Retail loan portfolio segments include consumer real estate, permanent mortgage, and the combined credit card and other portfolios. Retail classes include HELOC and real estate ("R/E") installment loans within the consumer real estate segment, permanent mortgage (which is both a segment and a class), and credit card and other. Restricted real estate loans include HELOCs that were previously securitized on balance sheet as well as HELOC and some permanent mortgages that were consolidated on January, 1, 2010 in conjunction with the adoption of amendments to ASC 810.

In third quarter 2011, FHN executed bulk sales of certain consumer and commercial loans, a significant majority of which were nonperforming. The largest transaction was a sale of permanent mortgages with an unpaid principal balance of approximately $188 million, or $126 million after consideration of partial charge-offs and lower of cost or market ("LOCOM") adjustments previously taken on the loans. FHN recognized a loss on sale of $29.8 million which is recognized within the loan loss provision and $40.2 million of net charge-offs associated with this sale. FHN also sold nonperforming commercial loans with unpaid principal balance of approximately $32 million and $23 million after consideration of amounts already charged off. FHN recognized a loss which is reflected in the loan loss provision of $6.0 million and $7.3 million of net charge-offs related to this commercial loan bulk sale.

Concentrations

FHN has a concentration of loans secured by residential real estate (42 percent of total loans), the majority of which is in the consumer real estate portfolio (32 percent of total loans). Additionally, on December 31, 2011,FHN had a sizeable portfolio of bank-related loans, including TRUPs totaling $0.6 billion (8 percent of the C&I portfolio, or 4 percent of total loans). While the stronger borrowers in this portfolio class have stabilized, the weaker financial institutions remain under stress due to limited availability of market liquidity and capital, and the impact from economic conditions on these borrowers.

Restrictions

On December 31, 2011, $4.9 billion of commercial loans were pledged to secure potential discount window borrowings from the Federal Reserve Bank. Additionally, as of December 31, 2011, FHN pledged all of its held-to-maturity first and second lien mortgages and HELOCs, excluding restricted real estate loans, to secure potential borrowings from the Federal Home Loan Bank.

Allowance for Loan Losses

The ALLL includes the following components: reserves for commercial loans evaluated based on pools of credit graded loans and reserves for pools of smaller-balance homogeneous retail loans, both determined in accordance with the ASC Topic related to Contingencies ("ASC 450-20-50"). The reserve factors applied to these pools are an estimate of probable incurred losses based on management's evaluation of historical net losses from loans with similar characteristics and are subject to adjustment by management to reflect current events, trends, and conditions (including economic considerations and trends). The slow economic recovery, weak housing market, elevated unemployment levels, and both positive and negative portfolio segment-specific trends, are examples of additional factors considered by management in determining the allowance for loan losses. Also included are reserves, determined in accordance with the Receivables Topic ("ASC 310-10-45"), for loans determined by management to be individually impaired.

Commercial

For commercial loans, reserves are established using historical net loss factors by grade level, loan product, and business segment. An assessment of the quality of individual commercial loans is made utilizing credit grades assigned internally based on a dual grading system which estimates both the probability of default ("PD") and loss severity in the event of default. PD grades range from 1-16 while estimated loss severities, or loss given default ("LGD") grades range from 1-12. This credit grading system is intended to identify and measure the credit quality of the loan portfolio by analyzing the migration of loans between grading categories. It is also integral to the estimation methodology utilized in determining the allowance for loan losses since an allowance is established for pools of commercial loans based on the credit grade assigned. The appropriate relationship team performs the process of categorizing commercial loans into the appropriate credit grades, initially as a component of the approval of the loan, and subsequently throughout the life of the loan as part of the servicing regimen. The proper loan grade for larger exposures is confirmed by a senior credit officer in the approval process. To determine the most appropriate credit grade for each loan, the credit risk grading system employs scorecards for particular categories of loans that consist of a number of objective and subjective measures that are weighted in a manner that produces a rank ordering of risk within pass-graded credits. Loan grading discipline is regularly reviewed by Credit Risk Assurance to determine if the process continues to result in accurate loan grading across the portfolio.

FHN may utilize availability of guarantors/sponsors to support lending decisions during the credit underwriting process and when determining the assignment of internal loan grades. Where guarantor contributions are determined to be a source of repayment, an assessment of the guarantee is made. This guarantee assessment would include but not be limited to factors such as type and feature of the guarantee, consideration for the guarantee, key provisions of the guarantee agreement, and ability of the guarantor to be a viable secondary source of repayment. Reliance on the guarantee as a viable secondary source of repayment is a function of an analysis proving capability to pay, factoring in, among other things, liquidity and direct/indirect debt cash flows. Therefore, a proper evaluation of each guarantor is critical. FHN establishes a guarantor's ability (financial wherewithal) to support a credit based on an analysis of recent information on the guarantor's financial condition. This would generally include income and asset information from sources such as recent tax returns, credit reports, and personal financial statements. In analyzing this information FHN seeks to assess a combination of liquidity, global cash flow, cash burn rate, and contingent liabilities to demonstrate the guarantor's capacity to sustain support for the credit and fulfill the obligation. FHN also considers the volume and amount of guarantees provided for all global indebtedness and the likelihood of realization. Guarantor financial information is periodically updated throughout the life of the loan. FHN presumes a guarantor's willingness to perform until financial support becomes necessary or if there is any current or prior indication or future expectation that the guarantor may not willingly and voluntarily perform under the terms of the guarantee. In FHN's risk grading approach, it is deemed that financial support becomes necessary generally at a point when the loan would otherwise be graded substandard, reflecting a well-defined weakness. At that point, provided willingness and capacity to support are appropriately demonstrated, a strong, legally enforceable guarantee can mitigate the risk of default or loss, justify a less severe rating, and consequently reduce the level of allowance or charge-off that might otherwise be deemed appropriate. FHN establishes guarantor willingness to support the credit through documented evidence of previous and ongoing support of the credit. Previous performance under a guarantor's obligation to pay is not considered if the performance was involuntary.

Retail

The ALLL for smaller-balance homogenous retail loans is determined based on pools of similar loan types that have similar credit risk characteristics. FHN manages retail loan credit risk on a class basis. Reserves by portfolio are determined using segmented roll-rate models that incorporate various factors including historical delinquency trends, experienced loss frequencies, and experienced loss severities. Generally, reserves for retail loans reflect inherent losses in the portfolio that are expected to be recognized over the following twelve months.

Individually Impaired

Generally, classified nonaccrual commercial loans over $1 million and all commercial and consumer loans classified as troubled debt restructurings ("TDRs") are deemed to be impaired and are individually assessed for impairment measurement in accordance with ASC 310-10. For all commercial portfolio segments, commercial TDRs and other individually impaired commercial loans are measured based on the present value of expected future payments discounted at the loan's effective interest rate ("the DCF method"), observable market prices, or for loans that are solely dependent on the collateral for repayment, the estimated fair value of the collateral less estimated costs to sell (net realizable value). For loans measured using the DCF method or by observable market prices, if the recorded investment in the impaired loan exceeds this amount, a specific allowance is established as a component of the allowance for loan and lease losses until such time as a loss is expected and recognized; however, for impaired collateral-dependent loans, FHN will charge off the full difference between the book value and the best estimate of net realizable value.

For all segments of consumer TDRs with the exception of the permanent mortgage segment, the associated allowance is determined by estimating the expected cash flows using the modified interest rate (if an interest rate concession), incorporating payoff and net charge-off rates specific to the TDRs within the portfolio segment being assessed, and discounted using the pre-modification interest rate. The discounted cash flows are then compared to the outstanding principal balance in order to determine required reserves. The reserve for consumer real estate TDRs utilizes total portfolio loss and attrition rates rather than TDR specific data. Prior to third quarter 2011, FHN removed TDRs entirely from the roll-rate model previously discussed which resulted in an increase in required TDR reserves for this portfolio segment. Currently, for the permanent mortgage segment, the base roll-rate models are run both with and without the TDRs to determine incremental reserves needed for restructured mortgage loans. Additionally, a qualitative factor representing the incremental inherent loss in such TDRs is applied to estimate the total required reserves for permanent mortgage TDRs.

The following table provides a rollforward of the allowance for loan losses by portfolio segment for 2011, 2010 and 2009:

(Dollars in thousands)	C&I				Commercial Real Estate				Consumer Real Estate				Permanent Mortgage				Credit Card and Other				Total
Balance as of January 1, 2009		$	191,893			$	199,925			$	181,818			$	53,585			$	221,989			$	849,210
Charge-offs			(129,283	)			(277,461	)			(224,853	)			(63,004	)			(182,360	)			(876,961	)
Recoveries			7,594				10,790				16,244				797				9,240				44,665
Provision			206,444				272,471				241,879				132,518				26,688				880,000
Balance as of December 31, 2009 (a)(b)			276,648				205,725				215,088				123,896				75,557				896,914
Allowance – individually evaluated for impairment			18,048				2,746				5,997				3,996				857				31,644
Allowance – collectively evaluated for impairment			258,600				202,979				209,091				119,900				74,700				865,270
Loans, net of unearned as of December 31, 2009:
Individually evaluated for impairment			103,616				405,458				25,766				26,229				3,098				564,167
Collectively evaluated for impairment			7,046,168				2,008,492				6,905,668				1,059,439				539,950				17,559,717
Total loans, net of unearned (a)(b)		$	7,149,784			$	2,413,950			$	6,931,434			$	1,085,668			$	543,048			$	18,123,884
Balance as of January 1, 2010		$	276,648			$	205,725			$	215,088			$	123,896			$	75,557			$	896,914
Adjustment due to amendments of ASC 810			-				-				16,106				8,472				-				24,578
Charge-offs			(97,272	)			(127,323	)			(233,269	)			(71,113	)			(47,564	)			(576,541	)
Recoveries			11,630				13,030				16,300				1,658				7,230				49,848
Provision			48,463				63,653				178,125				2,096				(22,337	)			270,000
Balance as of December 31, 2010 (a)(b)			239,469				155,085				192,350				65,009				12,886				664,799
Allowance – individually evaluated for impairment			61,327				17,395				19,691				16,678				267				115,358
Allowance – collectively evaluated for impairment			178,142				137,690				172,659				48,331				12,619				549,441
Loans, net of unearned as of December 31, 2010:
Individually evaluated for impairment			213,405				242,143				69,775				96,765				764				622,852
Collectively evaluated for impairment			7,124,750				1,428,381				6,249,637				1,045,792				311,160				16,159,720
Total loans, net of unearned (a)(b)		$	7,338,155			$	1,670,524			$	6,319,412			$	1,142,557			$	311,924			$	16,782,572
Balance as of January 1, 2011		$	239,469			$	155,085			$	192,350			$	65,009			$	12,886			$	664,799
Charge-offs			(76,728	)			(41,147	)			(164,922	)			(75,218	)			(19,253	)			(377,268	)
Recoveries			16,562				11,047				16,019				5,375				3,817				52,820
Provision			(48,890	)			(69,399	)			121,630				31,028				9,631				44,000
Balance as of December 31, 2011 (a)(b)			130,413				55,586				165,077				26,194				7,081				384,351
Allowance – individually evaluated for impairment			28,973				8,214				44,606				6,015				333				88,141
Allowance – collectively evaluated for impairment			101,440				47,372				120,471				20,179				6,748				296,210
Loans, net of unearned as of December 31, 2011:
Individually evaluated for impairment			170,124				115,319				120,127				73,064				1,117				479,751
Collectively evaluated for impairment			7,844,803				1,263,091				5,771,419				755,129				282,934				15,917,376
Total loans, net of unearned (a)(b)		$	8,014,927			$	1,378,410			$	5,891,546			$	828,193			$	284,051			$	16,397,127

(a)	Balances as of December 31, 2011 and 2010 include $25.7 million and $42.1 million of reserves, respectively, and $600.2 million and $701.8 million of balances in restricted consumer real estate loans, respectively.
(b)	Balances as of December 31, 2011 and 2010 include $6.1 million and $5.4 million of reserves, respectively, and $40.6 million and $55.7 million of balances in restricted permanent mortgage loans, respectively.

Impaired Loans

The average balance of impaired loans was $551.3 million for 2011, $593.5 million for 2010, and $532.2 million for 2009. Interest income of approximately $7 million for 2011, $4 million for 2010 and $1 million for 2009 was recognized during the periods related to such impaired loans.

The following tables provide information by class related to individually impaired loans. Recorded investment is defined as the amount of the investment in a loan, before valuation allowance but which does reflect any direct write-down of the investment.

(Dollars in thousands)	2011
	Recorded Investment			Unpaid Principal Balance			Related Allowance			Average Recorded Investment			Interest Income Recognized
Impaired loans with no related allowance recorded:
Commercial:
General C&I		$	78,804		$	119,974		$	-		$	61,631		$	1,099
TRUPs			43,177			47,000			-			34,292			-
Income CRE			67,653			122,183			-			87,771			821
Residential CRE			24,290			43,544			-			41,846			507
Total		$	213,924		$	332,701		$	-		$	225,540		$	2,427
Impaired loans with related allowance recorded:
Commercial:
General C&I		$	16,528		$	20,778		$	5,148		$	66,401		$	210
TRUPs			31,616			33,700			23,825			29,441			-
Income CRE			2,222			2,222			243			18,381			41
Residential CRE			21,153			21,153			7,971			30,733			-
Total		$	71,519		$	77,853		$	37,187		$	144,956		$	251
Retail:
HELOC		$	49,919		$	49,919		$	21,548		$	37,647		$	885
R/E Installment loans			70,208			70,208			23,058			57,304			987
Permanent mortgage			73,064			73,064			6,015			84,915			1,933
Credit card & other			1,117			1,117			333			941			48
Total		$	194,308		$	194,308		$	50,954		$	180,807		$	3,853
Total commercial		$	285,443		$	410,554		$	37,187		$	370,496		$	2,678
Total retail		$	194,308		$	194,308		$	50,954		$	180,807		$	3,853
Total impaired loans		$	479,751		$	604,862		$	88,141		$	551,303		$	6,531

(Dollars in thousands)	2010
	Recorded Investment			Unpaid Principal Balance			Related Allowance
Impaired loans with no related allowance recorded:
Commercial:
General C&I		$	44,459		$	65,929		$	-
TRUPs			25,406			28,000			-
Income CRE			107,888			176,650			-
Residential CRE			59,402			127,126			-
Total		$	237,155		$	397,705		$	-
Impaired loans with related allowance recorded:
Commercial:
General C&I		$	116,275		$	117,644		$	34,061
TRUPs			27,266			30,000			27,266
Income CRE			34,540			36,974			8,821
Residential CRE			40,313			44,091			8,574
Total		$	218,394		$	228,709		$	78,722
Retail:
HELOC		$	25,375		$	25,375		$	7,161
R/E Installment loans			44,399			44,399			12,530
Permanent mortgage			96,765			96,765			16,679
OTC, credit card, & other			764			764			266
Total		$	167,303		$	167,303		$	36,636
Total commercial		$	455,549		$	626,414		$	78,722
Total retail		$	167,303		$	167,303		$	36,636
Total impaired loans		$	622,852		$	793,717		$	115,358

Asset Quality Indicators

As previously discussed, FHN employs a dual grade commercial risk grading methodology to assign an estimate for PD and the LGD for each commercial loan, factors specific to various industry, portfolio, or product segments that result in a rank ordering of risk and the assignment of grades PD 1 to PD 16. Each PD grade corresponds to an estimated one-year default probability percentage; a PD 1 has the lowest expected default probability, and probabilities increase as grades progress down the scale. PD 1 through PD 12 are "pass" grades. Prior to second quarter 2011, all loans with an assigned PD grade of "12" which is the lowest pass grade were included on the Watch List. In second quarter 2011, FHN implemented an enhanced process for determining which loans warrant additional oversight and monitoring. The identification of Watch List loans is now determined by the appropriate relationship team and is generally driven by specific events that may impact borrowers, rather than being driven solely by the assigned PD grade. This process enhancement did not have a material impact on the allowance for loan and lease losses. PD grades 13-16 correspond to the regulatory-defined categories of special mention (13), substandard (14), doubtful (15), and loss (16). Pass loan grades are required to be reassessed no less frequently than annually or whenever there has been a material change in the financial condition of the borrower or risk characteristics of the relationship. All commercial loans over $1 million and certain commercial loans over $500,000 that are graded 13 or worse are reassessed on a quarterly basis. LGD grades are assigned based on a scale of 1-12 and represent FHN's expected recovery based on collateral type in the event a loan defaults.

The following tables provide the balances of commercial loan portfolio classes, disaggregated by PD grade as of December 31, 2011 and 2010:

(Dollars in millions)	2011
	General C&I			Loans to Mortgage Companies			TRUPS (a)			Income CRE			Residential CRE			Total			Allowance for Loan Losses
PD Grade:
1		$	172		$	-		$	-		$	-		$	-		$	172		$	-
2			156			-			-			3			-			159			-
3			162			-			-			20			-			182			-
4			221			-			-			7			-			228			1
5			385			-			-			25			-			410			1
6			892			157			-			115			4			1,168			5
7			892			664			-			175			6			1,737			9
8			979			391			-			144			1			1,515			15
9			634			155			-			152			3			944			15
10			477			27			-			108			1			613			11
11			432			-			-			123			2			557			14
12			157			-			-			15			4			176			5
13			264			-			334			75			8			681			15
14,15,16			290			-			4			225			47			566			58
Total loans collectively evaluated for impairment			6,113			1,394			338			1,187			76			9,108		$	149
Total loans individually evaluated for impairment			95			-			75			70			45			285			37
Total commercial loans		$	6,208		$	1,394		$	413		$	1,257		$	121		$	9,393		$	186

(Dollars in millions)	2010
	General C&I			Loans to Mortgage Companies			TRUPS (a)			Income CRE			Residential CRE			Total			Allowance for Loan Losses
PD Grade:
1		$	86		$	-		$	-		$	-		$	-		$	86		$	-
2			87			-			-			4			-			91			-
3			143			-			-			16			-			159			1
4			199			-			-			8			-			207			2
5			360			-			-			24			1			385			5
6			666			88			-			53			-			807			6
7			855			214			-			96			5			1,170			11
8			997			387			-			151			5			1,540			18
9			491			112			-			146			3			752			15
10			463			12			-			82			4			561			11
11			493			-			-			113			3			609			20
12			246			2			-			30			7			285			12
13			422			-			276			167			14			879			51
14,15,16			423			2			101			375			121			1,022			164
Total loans collectively evaluated for impairment			5,931			817			377			1,265			163			8,553			316
Total loans individually evaluated for impairment			161			-			53			142			100			456			79
Total commercial loans		$	6,092		$	817		$	430		$	1,407		$	263		$	9,009		$	395

(a) Balances as of December 31, 2011 and 2010 presented net of $34.2 million and $35.6 million respectively lower of cost or market ("LOCOM") valuation allowance. Based on the underlying structure of the notes, the highest possible internal grade is "13". Portfolio reserve estimate considers recent financial performance of individual borrowers and other factors.

The retail portfolio is comprised primarily of smaller-balance loans which are very similar in nature in that most are standard products and are backed by residential real estate. Because of the similarities of retail loan-types, FHN is able to utilize the Fair Isaac Corporation ("FICO") score, among other attributes, to assess the quality of consumer borrowers. FICO scores are refreshed on a quarterly basis in an attempt to reflect the recent risk profile of the borrowers. Accruing delinquency amounts are also indicators of other retail portfolio asset quality.

The following tables reflect period-end balances and various asset quality indicators by origination vintage for the HELOC, real estate installment, and permanent mortgage classes of loans as of December 31, 2011.

HELOC (Dollars in millions)	Period End Balance (a)			Origination Characteristics														Avg Refreshed FICO
				Avg orig CLTV			Avg orig FICO		% Broker			% TN			% 1st Lien
Origination Vintage
pre-2003		$	182		75.6	%		723		15.2	%		40.3	%		22.9	%		719
2003			273		76.1	%		733		23.8	%		26.6	%		16.8	%		726
2004			588		79.7	%		728		31.7	%		17.4	%		19.6	%		720
2005			732		79.5	%		734		15.9	%		16.6	%		12.0	%		722
2006			544		76.8	%		741		6.6	%		22.9	%		13.8	%		726
2007			566		77.5	%		746		13.6	%		28.8	%		15.0	%		732
2008			293		74.0	%		755		8.7	%		69.9	%		37.2	%		749
2009			179		71.6	%		754		0.0	%		86.6	%		45.4	%		755
2010			174		72.9	%		755		0.0	%		94.6	%		45.2	%		757
2011			159		71.1	%		760		0.0	%		92.6	%		51.5	%		758
Total		$	3,690		76.9	%		740		14.5	%		36.0	%		21.7	%		731

(a) Includes $600.2 million of restricted loan balances.  

R/E Installment Loans (Dollars in millions)	Period End Balance			Origination Characteristics														Avg Refreshed FICO
				Avg orig CLTV			Avg orig FICO		% Broker			% TN			% 1st Lien
Origination Vintage
pre-2003		$	56		77.8	%		689		18.3	%		62.1	%		66.2	%		687
2003			163		72.5	%		722		3.0	%		43.6	%		77.5	%		732
2004			97		74.1	%		710		7.9	%		49.6	%		72.8	%		708
2005			272		83.3	%		720		26.3	%		20.4	%		27.5	%		714
2006			295		79.4	%		721		4.7	%		23.5	%		24.2	%		706
2007			415		82.5	%		730		16.1	%		23.5	%		24.7	%		714
2008			153		77.9	%		734		6.2	%		77.6	%		78.5	%		729
2009			94		72.7	%		751		0.0	%		90.1	%		82.7	%		751
2010			196		85.8	%		747		0.0	%		88.8	%		97.9	%		753
2011			461		78.9	%		760		0.0	%		88.5	%		97.5	%		759
Total		$	2,202		79.8	%		734		8.4	%		52.7	%		60.0	%		729

Permanent Mortgage (Dollars in millions)	Period End Balance (a)			Origination Characteristics														Avg Refreshed FICO
				Avg orig CLTV			Avg orig FICO		% Broker			% TN			% 1st Lien
Origination Vintage
pre-2004		$	170		64.8	%		726		48.7	%		10.0	%		96.9	%		739
2004			12		78.2	%		719		17.8	%		15.0	%		100.0	%		690
2005			63		74.4	%		740		37.3	%		2.6	%		100.0	%		733
2006			115		71.5	%		735		37.9	%		1.4	%		100.0	%		710
2007			314		71.0	%		734		55.5	%		1.2	%		100.0	%		706
2008			154		73.9	%		742		50.1	%		0.4	%		99.9	%		718
Total		$	828		70.9	%		734		48.7	%		3.1	%		99.4	%		717

(a) Includes $40.6 million of restricted loan balances and first lien mortgages recognized through the exercise of cleanup calls for certain proprietary first lien securitization trusts.  

The following tables reflect period-end balances and various asset quality indicators by origination vintage for the HELOC, real estate installment, and permanent mortgage classes of loans as of December 31, 2010:

HELOC (Dollars in millions)	Period End Balance (a)			Origination Characteristics														Avg Refreshed FICO
				Avg orig CLTV			Avg orig FICO		% Broker			% TN			% 1st Lien
Origination Vintage
pre-2003		$	230		75.5	%		724		14.2	%		42.3	%		22.7	%		723
2003			321		76.3	%		733		24.4	%		25.7	%		15.4	%		730
2004			690		79.5	%		729		31.8	%		17.3	%		18.8	%		722
2005			855		79.5	%		735		16.5	%		17.0	%		11.7	%		722
2006			630		76.8	%		742		7.0	%		24.4	%		13.6	%		730
2007			630		77.5	%		746		13.8	%		28.9	%		14.3	%		734
2008			323		74.1	%		755		8.8	%		69.7	%		36.8	%		753
2009			205		71.8	%		756		0.0	%		86.6	%		45.3	%		759
2010			199		73.0	%		758		0.0	%		94.9	%		46.5	%		757
Total		$	4,083		77.2	%		740		15.4	%		33.6	%		19.9	%		732

(a) Includes $701.8 million of restricted loan balances.  

R/E Installment Loans (Dollars in millions)	Period End Balance			Origination Characteristics														Avg Refreshed FICO
				Avg orig CLTV			Avg orig FICO		% Broker			% TN			% 1st Lien
Origination Vintage
pre-2003		$	83		77.2	%		697		17.7	%		62.3	%		67.2	%		727
2003			222		72.4	%		726		3.1	%		44.4	%		77.5	%		731
2004			128		73.6	%		714		7.2	%		51.4	%		71.5	%		724
2005			343		82.5	%		722		25.7	%		21.7	%		27.8	%		721
2006			378		78.3	%		723		4.7	%		25.5	%		25.6	%		728
2007			520		81.1	%		732		15.7	%		24.2	%		24.3	%		734
2008			211		76.8	%		740		5.6	%		78.7	%		78.3	%		751
2009			134		71.1	%		753		0.0	%		89.6	%		82.6	%		760
2010			217		82.1	%		748		0.0	%		89.2	%		96.5	%		751
Total		$	2,236		78.3	%		729		10.3	%		44.4	%		50.2	%		732

Permanent Mortgage (Dollars in millions)	Period End Balance (a)			Origination Characteristics														Avg Refreshed FICO (b)
				Avg orig CLTV			Avg orig FICO		% Broker			% TN			% 1st Lien
Origination Vintage
pre-2004		$	190		67.8	%		727		48.2	%		9.6	%		99.6	%		N/A
2004			15		82.0	%		725		19.2	%		25.7	%		100.0	%		N/A
2005			81		79.8	%		742		34.3	%		5.4	%		98.3	%		N/A
2006			154		79.2	%		734		41.1	%		2.1	%		97.0	%		N/A
2007			447		79.1	%		732		56.1	%		1.0	%		95.6	%		N/A
2008			256		79.9	%		737		55.7	%		0.8	%		100.0	%		N/A
Total		$	1,143		77.6	%		733		50.7	%		3.1	%		97.7	%		N/A

(a)	Includes $55.7 million of restricted loan balances and first lien mortgages recognized through the exercise of cleanup calls for certain proprietary first lien securitization trusts.
(b)	Refreshed FICO scores were not obtained prior to first quarter 2011.

The following table reflects accruing delinquency amounts for the credit card and other portfolio classes.

(Dollars in millions)	Credit Card						Other
	2011			2010			2011			2010
Accruing delinquent balances:
30-89 days past due		$	1.9		$	1.9		$	0.4		$	0.8
90+ days past due			1.4			1.6			0.1			0.2
Total		$	3.3		$	3.5		$	0.5		$	1.0

Nonaccrual and Past Due Loans

For all portfolio segments and classes, loans are placed on nonaccrual status if it becomes evident that full collection of principal and interest is at risk, impairment has been recognized as a partial charge-off of principal balance, or on a case-by-case basis if FHN continues to receive principal and interest payments, but there are atypical loan structures or other borrower-specific issues. FHN does have a meaningful portion of loans that are classified as nonaccrual but where it continues to receive payments.

The following table reflects accruing and non-accruing loans by class on December 31, 2011:

(Dollars in thousands)	Accruing												Non-Accruing												Total Loans
	Current			30-89 Days Past Due			90 + Days Past Due			Total Accruing			Current			30-89 Days Past Due			90 + Days Past Due			Total Non- Accruing
Commercial (C&I):
General C&I		$	6,109,009		$	11,576		$	234		$	6,120,819		$	42,396		$	12,938		$	31,611		$	86,945		$	6,207,764
Loans to mortgage companies			1,393,659			40			-			1,393,699			-			-			491			491			1,394,190
TRUPS (a)			338,180			-			-			338,180			-			-			74,793			74,793			412,973
Total commercial (C&I)			7,840,848			11,616			234			7,852,698			42,396			12,938			106,895			162,229			8,014,927
Commercial real estate:
Income CRE			1,178,708			9,610			-			1,188,318			20,272			2,125			46,782			69,179			1,257,497
Residential CRE			74,252			875			-			75,127			25,149			7,359			13,278			45,786			120,913
Total commercial real estate			1,252,960			10,485			-			1,263,445			45,421			9,484			60,060			114,965			1,378,410
Consumer real estate:
HELOC (b)			3,598,926			44,728			25,978			3,669,632			10,446			1,079			8,878			20,403			3,690,035
R/E installment loans			2,145,181			26,310			11,647			2,183,138			11,781			1,358			5,234			18,373			2,201,511
Total consumer real estate			5,744,107			71,038			37,625			5,852,770			22,227			2,437			14,112			38,776			5,891,546
Permanent mortgage (b)			764,388			15,401			12,415			792,204			15,066			342			20,581			35,989			828,193
Credit card & other
Credit card			188,702			1,868			1,422			191,992			-			-			-			-			191,992
Other			89,433			405			80			89,918			5			-			2,136			2,141			92,059
Total credit card & other			278,135			2,273			1,502			281,910			5			-			2,136			2,141			284,051
Total loans, net of unearned		$	15,880,438		$	110,813		$	51,776		$	16,043,027		$	125,115		$	25,201		$	203,784		$	354,100		$	16,397,127

(a)	Includes LOCOM valuation allowance of $34.2 million.
(b)	Includes restricted loans.

The following table reflects accruing and non-accruing loans by class on December 31, 2010:

(Dollars in thousands)	Accruing												Non-Accruing												Total Loans
	Current			30-89 Days Past Due			90 + Days Past Due			Total Accruing			Current			30-89 Days Past Due			90 + Days Past Due			Total Non- Accruing
Commercial (C&I):
General C&I		$	5,905,087		$	26,508		$	182		$	5,931,777		$	89,307		$	18,154		$	52,263		$	159,724		$	6,091,501
Loans to mortgage companies			815,529			-			-			815,529			-			-			1,597			1,597			817,126
TRUPS (a)			376,856			-			-			376,856			-			-			52,672			52,672			429,528
Total commercial (C&I)			7,097,472			26,508			182			7,124,162			89,307			18,154			106,532			213,993			7,338,155
Commercial real estate:
Income CRE			1,248,209			16,915			-			1,265,124			32,248			3,516			105,758			141,522			1,406,646
Residential CRE			144,524			8,409			-			152,933			26,095			3,283			81,567			110,945			263,878
Total commercial real estate			1,392,733			25,324			-			1,418,057			58,343			6,799			187,325			252,467			1,670,524
Consumer real estate:
HELOC (b)			3,980,830			55,122			32,717			4,068,669			8,461			563			5,349			14,373			4,083,042
R/E installment loans			2,164,544			35,528			15,220			2,215,292			13,631			1,287			6,160			21,078			2,236,370
Total consumer real estate			6,145,374			90,650			47,937			6,283,961			22,092			1,850			11,509			35,451			6,319,412
Permanent mortgage (b)			959,431			28,041			29,367			1,016,839			15,088			9,814			100,816			125,718			1,142,557
Credit card & other
Credit card			188,921			1,912			1,604			192,437			-			-			-			-			192,437
Other			99,259			798			154			100,211			-			-			19,276			19,276			119,487
Total credit card & other			288,180			2,710			1,758			292,648			-			-			19,276			19,276			311,924
Total loans, net of unearned		$	15,883,190		$	173,233		$	79,244		$	16,135,667		$	184,830		$	36,617		$	425,458		$	646,905		$	16,782,572

(a)	Includes LOCOM valuation allowance of $35.6 million.
(b)	Includes restricted loans.

Troubled Debt Restructurings

As part of FHN's ongoing risk management practices, FHN attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Each occurrence is unique to the borrower and is evaluated separately. FHN considers regulatory guidelines when restructuring loans to ensure that prudent lending practices are followed. As such, qualification criteria and payment terms consider the borrower's current and prospective ability to comply with the modified terms of the loan.

A modification is classified as a TDR if the borrower is experiencing financial difficulty and it is determined that FHN has granted a concession to the borrower. FHN may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future. Many aspects of a borrower's financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of loan structures, business/industry risk, and borrower/guarantor structures. Concessions could include reductions of interest rates, extension of the maturity date at a rate lower than current market rate for a new loan with similar risk, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, FHN also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate FHN for the restructured terms. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management's judgment is required when determining whether a modification is classified as a TDR.

Although each occurrence is unique to the borrower and is evaluated separately, for all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 3 to 6 months). Forbearance agreements could include reduced interest rates, reduced payments, release of guarantor, or entering into short sale agreements. FHN's proprietary modification programs for consumer loans are generally structured using parameters of U.S. government-sponsored programs such as Home Affordable Modification Programs ("HAMP"). Within the HELOC, R/E installment loans, and permanent mortgage classes of the consumer portfolio segment, TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 1 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. Contractual maturities may be extended up to 40 years on permanent mortgages and up to 20 years for consumer real estate loans. Within the credit card class of the consumer portfolio segment, TDRs are typically modified through either a short-term credit card hardship program or a longer-term credit card workout program. In the credit card hardship program, borrowers may be granted rate and payment reductions for 6 months to 1 year. In the credit card workout program, customers are granted a rate reduction to 0 percent and term extensions for up to 5 years to pay off the remaining balance. On December 31, 2011 and 2010, FHN had loans classified as TDRs of $284.2 million and $282.8 million, respectively. Additionally, FHN had restructured $98.0 million and $56.0 million of loans held for sale as of December 31, 2011 and 2010, respectively. For restructured loans in the portfolio, FHN had loan loss reserves of $52.7 million, or 19 percent of the recorded investment amount, as of December 31, 2011. On December 31, 2011 and 2010, there were no significant outstanding commitments to advance additional funds to customers whose loans had been restructured.

The following table reflects modifications of portfolio loans occurring during the year ending December 31, 2011 that have been classified as TDRs:

(Dollars in thousands)	2011
	Number		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment
Commercial (C&I):
General C&I		18		$	15,960		$	15,524
Loans to Mortgage Companies		-			-			-
TRUPS		-			-			-
Total commercial (C&I)		18			15,960			15,524
Commercial real estate:
Income CRE		13			13,630			13,155
Residential CRE		6			2,257			2,735
Total commercial real estate		19			15,887			15,890
Consumer real estate:
HELOC		169			21,093			20,992
R/E installment loans		147			21,044			21,249
Total consumer real estate		316			42,137			42,241
Permanent mortgage		129			79,776			82,633
Credit card & other:
Credit card		102			451			590
Other		-			-			-
Total credit card & other		102			451			590
Total troubled debt restructurings		584		$	154,211		$	156,878

Financing receivables modified as TDRs within the previous 12 months and for which there was a payment default during the period are calculated by first identifying TDRs that defaulted during the period and then determining whether they were modified within the 12 months prior to the default.

The following table reflects TDRs within the previous 12 months for which there was a payment default during the year ending December 31, 2011. For purposes of this disclosure, FHN defines payment default as generally 30 plus days past due.

(Dollars in thousands)	2011
	Number		Recorded Investment
Commercial (C&I):
General C&I		43		$	31,663
Loans to Mortgage Companies		-			-
TRUPS		-			-
Total commercial (C&I)		43			31,663
Commercial real estate:
Income CRE		24			26,563
Residential CRE		15			18,512
Total commercial real estate		39			45,075
Consumer real estate:
HELOC		35			6,041
R/E installment loans		26			2,421
Total consumer real estate		61			8,462
Permanent mortgage		37			37,976
Credit card & other:
Credit card		51			3,842
Other		-			-
Total credit card & other		51			3,842
Total troubled debt restructurings		231		$	127,018

The determination of whether a TDR is placed on nonaccrual status generally follows the same internal policies and procedures as other portfolio loans. However, FHN will typically place a consumer loan on nonaccrual status if it is 30 or more days delinquent upon modification into a TDR. For commercial loans, nonaccrual TDRs that are reasonably assured of repayment according to their modified terms may be returned to accrual status by FHN upon a detailed credit evaluation of the borrower's financial condition and prospects for repayment under the revised terms. For consumer loans, FHN's evaluation supporting the decision to return a modified loan to accrual status includes consideration of the borrower's sustained historical repayment performance for a reasonable period prior to the date on which the loan is returned to accrual status, which is generally a minimum of six months. FHN may also consider a borrower's sustained historical repayment performance for a reasonable time prior to the restructuring in assessing whether the borrower can meet the restructured terms, as it may indicate that the borrower is capable of servicing the level of debt under the modified terms. Otherwise, FHN will continue to classify restructured loans as nonaccrual. Consistent with regulatory guidance, upon sustained performance and classification as a TDR over FHN's year-end, the loan will be removed from TDR status as long as the modified terms were market-based at the time of modification.