EX-99 2 exhibit991.htm EXHIBIT 99.1

Exhibit 99.1


THIRD QUARTER 2005
FINANCIAL SUPPLEMENT

The following supplement is provided to assist in your financial analysis. 

If you need further information, please contact: 

Mark Yates, SVP
Investor Relations
901/523-4068
myates@firsthorizon.com

CONSOLIDATED SUMMARY
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
Net interest income $260,161  $241,608  $227,447  $228,446  $218,250 
Noninterest income 369,943  343,312  343,464  313,682  307,231 
Divestitures                    -                     -                     -              3,200                     - 
Security G/L (406) 75  (66) (3,734) 20,383 
Total revenue 629,698  584,995  570,845  541,594  545,864 
Noninterest expense 436,219  419,031  394,855  382,688  365,596 
Provision 22,608  15,786  13,109  11,783  10,044 
Pretax income 170,871  150,178  162,881  147,123  170,224 
Income taxes 54,674  47,473  53,672  43,971  56,623 
Net income 116,197  102,705  109,209  103,152  113,601 
       
Diluted shares 129,359  128,914  128,032  127,719  127,845 
EPS $0.90  $0.80  $0.85  $0.81  $0.89 
Tax rate 32% 32% 33% 30% 33%
Efficiency ratio 69% 72% 69% 71% 67%
                 
Certain previously reported amounts have been reclassified to agree with current presentation.

1

STATEMENTS OF INCOME
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
Interest income $497,439  $438,385  $384,876  $334,789  $300,183 
Less interest expense 237,278  196,777  157,429  106,343  81,933 
  Net interest income 260,161  241,608  227,447  228,446  218,250 
Provision for loan losses 22,608  15,786  13,109  11,783  10,044 
  Net interest income after    
  provision for loan losses 237,553  225,822  214,338  216,663  208,206 
Noninterest income:    
  Mortgage banking 140,482  108,993  118,762  94,771  105,155 
  Capital markets 82,158  94,789  95,162  76,522  79,913 
  Deposit transactions    
  and cash management 41,268  39,471  33,255  37,695  38,624 
  Merchant processing 22,680  23,239  20,460  19,679  19,299 
  Insurance commissions 12,673  13,525  14,749  11,649  13,962 
  Trust services and investment    
  management 11,299  11,278  11,164  11,741  11,838 
  Gains on divestitures                    -                     -                     -              3,200                     - 
  Securities (losses)/gains, net (406) 75  (66) (3,734) 20,383 
  Other 59,383  52,017  49,912  61,625  38,440 
Total noninterest income 369,537  343,387  343,398  313,148  327,614 
  Adjusted gross income after    
  provision for loan losses 607,090  569,209  557,736  529,811  535,820 
Noninterest expense:    
  Employee compensation,    
  incentives and benefits 261,906  248,064  242,986  228,206  210,089 
  Occupancy 26,547  26,548  24,516  22,875  23,865 
  Equipment rentals, depreciation,    
  and maintenance 19,668  19,406  18,085  18,633  18,713 
  Operations services 20,660  20,328  18,477  18,379  17,801 
  Communications and courier 14,809  13,684  12,893  12,446  12,118 
  Amortization of intangible assets 3,598  3,360  3,362  3,014  2,165 
  Other 89,031  87,641  74,536  79,135  80,845 
Total noninterest expense 436,219  419,031  394,855  382,688  365,596 
Pretax income 170,871  150,178  162,881  147,123  170,224 
  Applicable income taxes 54,674  47,473  53,672  43,971  56,623 
Net income $116,197  $102,705  $109,209  $103,152  $113,601 
Diluted earnings per common share $        .90  $        .80  $        .85  $        .81  $        .89 
Dividends declared        .43         .43         .43         .43         .40 
SELECTED FINANCIAL RATIOS:      
Return on average assets 1.21% 1.14% 1.30% 1.40% 1.63%
Return on average shareholders' equity            21.1               19.6               21.8               20.8               23.7   
Certain previously reported amounts have been reclassified to agree with current presentation.

2

OTHER INCOME AND OTHER EXPENSE
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
All other income and commissions:    
Revenue from loan sales and securitizations $10,878  $10,319  $13,232  $14,151  $22 
Cardholder fees            7,070  6,733  6,092  6,405  6,461 
Other service charges            5,968  5,753  5,218  5,270  4,696 
Remittance processing            3,908  3,790  3,787  3,888  4,423 
Check clearing fees            1,885  1,778  1,869  2,340  2,562 
Other           29,674  23,644  19,714  29,571  20,276 
Total      $59,383   $52,017   $49,912   $  61,625   $  38,440 
All other expense:    
Advertising and public relations  $  11,254   $12,518   $11,535   $    8,585   $  9,976 
Legal and professional fees           12,439  11,829  8,749  11,816  9,529 
Travel and entertainment            7,721  8,898  7,445  8,684  7,983 
Computer software            8,333  8,845  7,024  7,199  7,127 
Contract employment            7,913  8,631  6,700  7,877  6,264 
Supplies            4,737  4,040  4,360  4,399  4,187 
Foreclosed real estate             3,547  (614) 2,497  2,759  2,072 
Fed service fees            1,885  1,905  1,926  1,979  2,263 
Deposit insurance premium               795  746  689  923  661 
Charitable contributions               950  460  374  339  414 
Other               29,457  30,383  23,237  24,575  30,369 
Total               89,031            87,641            74,536            79,135  80,845 
Certain previously reported amounts have been reclassified to agree with current presentation.

3

AVERAGE STATEMENTS OF CONDITION
Quarterly, Unaudited
(Millions)  3Q05  2Q05 1Q05 4Q04 3Q04
Assets:    
Earning assets:    
  Loans, net of unearned income $  18,722.0  $  17,782.3  $  16,680.6  $  16,836.4  $  15,858.6 
  Investment securities 2,934.1  2,931.3  2,794.8  2,150.6  2,625.7 
  Other earning assets:    
  Loans held for sale 6,936.8  6,055.9  5,315.1  4,696.1  4,036.7 
  Federal funds sold and securities     
     purchased under agreements to resell 2,532.7  2,482.6  2,047.3  783.7  716.8 
  Capital markets securities inventory 2,158.3  2,069.1  2,235.0  856.9  719.5 
  Mortgage banking trading securities 271.9  292.3  288.4  249.5  240.0 
  Investment in bank time deposits 6.3  5.7  5.9  5.6  11.4 
     Total other earning assets 11,906.0  10,905.6  9,891.7  6,591.8  5,724.4 
    Total earning assets 33,562.1  31,619.2  29,367.1  25,578.8  24,208.7 
Allowance for loan losses (176.2) (169.4) (164.6) (165.2) (165.1)
Cash and due from banks 769.8  727.4  729.8  779.2  740.0 
Premises and equipment, net 400.5  387.5  378.0  373.7  369.5 
Capital markets receivables 393.5  742.2  880.5  153.4  184.6 
Other assets 3,141.3  2,975.3  2,900.6  2,590.0  2,378.9 
  Total assets 38,091.0  36,282.2  34,091.4  29,309.9  27,716.6 
     
Liabilities and shareholders' equity:    
Interest-bearing deposits:    
  Savings $  289.7  $  294.4  $  294.1  $  292.6  $  293.1 
  Checking interest and money market 4,287.2  4,319.5  4,273.7  3,935.8  3,835.5 
  Certificates of deposit under $100,000    
    and other time 2,278.1  2,184.3  2,102.4  2,065.8  2,015.0 
     Total interest-bearing core deposits 6,855.0  6,798.2  6,670.2  6,294.2  6,143.6 
Noninterest-bearing deposits 5,659.0  5,167.4  4,786.7  4,913.7  4,542.2 
  Total core deposits 12,514.0  11,965.6  11,456.9  11,207.9  10,685.8 
Certificates of deposit $100,000 and more 11,467.8  10,557.3  10,147.1  8,079.0  6,971.1 
  Total deposits 23,981.8  22,522.9  21,604.0  19,286.9  17,656.9 
Federal funds purchased and securities    
  sold under agreements to repurchase 4,913.3  4,651.6  3,991.2  3,731.0  3,993.3 
Trading liabilities 1,665.3  1,589.4  1,470.5  614.8  484.2 
Commercial paper and other short-term    
  borrowings 1,230.4  998.8  691.0  161.0  125.2 
Term borrowings 2,374.6  2,585.2  2,616.1  2,385.1  2,340.6 
Capital markets payables 350.5  423.8  569.8  124.0  155.3 
Other liabilities 1,093.6  1,115.4  1,083.4  1,033.4  1,055.1 
Preferred stock of subsidiary 295.3  295.4  30.0  0.5  0.5 
Shareholders' equity 2,186.2  2,099.7  2,035.4  1,973.2  1,905.5 
    Total liabilities and shareholders' equity 38,091.0  36,282.2  34,091.4  29,309.9  27,716.6 

4

PERIOD END STATEMENTS OF CONDITION
Quarterly, Unaudited
(Millions)  3Q05  2Q05 1Q05 4Q04 3Q04
Assets:    
Cash and due from banks $  1,037.4  $     989.9  $     773.4  $     638.2  $     810.5 
Federal funds sold and securities    
   purchased under agreements to resell      1,972.3       1,911.0       1,599.0          682.3          475.3 
  Total cash and cash equivalents      3,009.7       2,900.9       2,372.4       1,320.5       1,285.8 
Investment in bank time deposits             6.4              5.2            10.7              5.3              5.7 
Trading securities      2,013.5       2,064.5       1,826.6          988.0       1,068.6 
Loans held for sale      5,158.1       5,795.5       5,277.2       5,168.0       3,893.3 
Securities available for sale      2,841.6       2,998.1       2,899.5       2,680.6       1,771.7 
Securities held to maturity              .4               .4               .4               .4               .5 
Loans, net of unearned income     19,212.1      18,428.6      17,183.8      16,427.7      16,403.3 
  Less: Allowance for loan losses         185.0          169.7          164.2          158.2          161.8 
  Total net loans     19,027.1  18,258.9  17,019.6  16,269.5  16,241.5 
Capital markets receivables 1,453.4  1,694.7  2,435.5  276.3  1,025.8 
Mortgage servicing rights, net 1,210.3  1,018.0  1,135.6  1,036.4  966.1 
Goodwill 309.5  292.1  287.9  187.2  184.7 
Other intangible assets, net 86.9  86.5  89.6  34.8  37.2 
Premises and equipment, net 412.0  391.1  384.5  379.4  369.7 
Real estate acquired by foreclosure 27.8  27.1  25.7  27.8  32.5 
Other assets 1,485.6  1,632.8  1,392.2  1,397.5  1,411.6 
  Total assets $37,042.3  $37,165.8  $35,157.4  $29,771.7  $28,294.7 
     
Liabilities and shareholders' equity:    
Deposits:    
  Savings $     288.9  $     290.3  $     299.0  $     289.8  $     290.1 
  Checking interest and money market 4,331.6  4,231.8  4,338.5  4,220.4  3,822.9 
  Certificates of deposit under $100,000    
    and other time 2,338.4  2,223.5  2,145.3  2,061.2  2,051.8 
  Total interest-bearing core deposits 6,958.9  6,745.6  6,782.8  6,571.4  6,164.8 
  Noninterest-bearing deposits 5,891.5  5,949.6  5,508.6  4,994.6  4,956.3 
       Total core deposits 12,850.4  12,695.2  12,291.4  11,566.0  11,121.1 
  Certificates of deposit $100,000 and more 12,497.2  8,962.7  10,781.0  8,216.2  7,801.2 
          Total deposits 25,347.6  21,657.9  23,072.4  19,782.2  18,922.3 
Federal funds purchased and securities    
  sold under agreements to repurchase 2,358.0  5,459.0  2,788.2  3,247.0  2,152.9 
Trading liabilities         906.6  1,192.0  924.0  426.3  291.6 
Commercial paper and other short-term    
  borrowings      1,217.9       1,172.6          967.7          139.8          208.9 
Term borrowings      2,000.1       2,537.0       2,591.4       2,616.4       2,453.5 
Capital markets payables      1,507.6       1,519.1       1,283.8          390.3       1,159.0 
Other liabilities      1,151.3       1,149.6       1,141.4       1,128.2       1,123.4 
  Total liabilities     34,489.1      34,687.2      32,768.9      27,730.2      26,311.6 
Preferred stock of subsidiary         295.3          295.3          295.8               .5               .4 
Shareholders' equity:    
Common stock           78.7            78.2            77.6            77.2            76.9 
Capital surplus         259.0          228.5          196.5          173.9          165.2 
Undivided profits      1,962.8       1,900.8       1,851.8       1,795.8       1,745.8 
Accumulated other comprehensive loss, net          (33.6)          (13.7)          (36.2)            (9.9)          (11.2)
Deferred compensation on incentive plans          (21.1)          (22.6)            (9.1)            (8.2)            (7.1)
Deferred compensation obligation 12.1  12.1  12.1  12.2  13.1 
  Total shareholders' equity 2,257.9  2,183.3  2,092.7  2,041.0  1,982.7 
Total liabilities and shareholders' equity $37,042.3  $37,165.8  $35,157.4  $29,771.7  $28,294.7 

5

AVERAGE AND PERIOD-END LOANS
Quarterly, Unaudited
(Millions)  3Q05  2Q05 1Q05 4Q04 3Q04
Average loans:    
Loans, net of unearned income:    
  Commercial:    
  Commercial, financial and industrial $  6,176.2  $  5,894.5  $  5,480.1  $  5,213.6  $  4,935.3 
  Real estate commercial 1,163.2  1,086.3  1,004.5  929.7  960.2 
    Real estate construction 1,735.9  1,546.2  1,306.0  1,132.1  945.1 
   Total commercial loans 9,075.3  8,527.0  7,790.6  7,275.4  6,840.6 
  Retail:    
  Real estate residential 7,593.7  7,533.5  7,385.8  8,204.5  7,852.6 
  Real estate construction 1,643.9  1,321.2  1,105.4  939.8  746.1 
  Other retail 167.5  161.1  160.7  172.6  180.0 
    Credit card receivables 241.6  239.5  238.1  244.1  239.3 
     Total retail loans 9,646.7  9,255.3  8,890.0  9,561.0  9,018.0 
  Total loans, net of unearned income $18,722.0  $17,782.3  $16,680.6  $16,836.4  $15,858.6 
     
       
     
Period-end loans:    
Loans, net of unearned income:    
  Commercial:    
  Commercial, financial and industrial $  6,354.8  $  6,181.6  $  5,781.3  $  5,560.7  $  5,097.0 
  Real estate commercial 1,171.6  1,128.2  1,030.1  960.2  931.5 
    Real estate construction 1,849.1  1,662.8  1,428.0  1,208.7  1,027.2 
   Total commercial loans 9,375.5  8,972.6  8,239.4  7,729.6  7,055.7 
  Retail:    
  Real estate residential 7,603.3  7,549.9  7,358.9  7,244.7  8,081.4 
  Real estate construction 1,814.6  1,499.5  1,190.1  1,035.6  845.4 
  Other retail 170.7  163.8  160.5  168.8  175.6 
    Credit card receivables 248.0  242.8  234.9  249.0  245.2 
     Total retail loans 9,836.6  9,456.0  8,944.4  8,698.1  9,347.6 
    Total loans, net of unearned income $19,212.1  $18,428.6  $17,183.8  $16,427.7  $16,403.3 

6

RETAIL/COMMERCIAL BANKING
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
Net interest income $224,264  $210,327  $197,267  $193,380  $178,643 
Noninterest income 129,503       123,104  121,379  127,466  114,461 
Divestitures                -                 -                 -          3,200                 - 
Security G/L                -                 -  -  (1) 637 
Total revenue 353,767  333,431  318,646  324,045  293,741 
Total noninterest expense   212,403  207,800  192,868  196,836  184,268 
Provision 22,428  15,667  13,069  11,798  10,044 
Pretax income 118,936  109,964  112,709  115,411  99,429 
       
Efficiency ratio 60% 62% 61% 61% 63%
       
Average loans (millions) $18,613  $17,700  $16,622  $16,792  $15,827 
Other earning assets (millions) 2,250  1,844  1,774  1,124  731 
  Total earning assets (millions) 20,863  19,544  18,396  17,916  16,558 
       
Total deposits 10,916  10,606  10,384  9,975  9,666 
       
Net interest margin 4.26% 4.32% 4.35% 4.29% 4.29%
       
Noninterest revenue detail          
Deposit transactions & cash mgmt $41,298  $39,440  $33,254  $37,694  $38,622 
Merchant processing 22,685  23,243  20,465  19,683  19,304 
Insurance commissions 12,236  13,085  14,287  11,206  13,539 
Trust services & investment mgmt 11,300  11,278  11,164  11,741  11,837 
Cardholder fees 6,836  6,529  5,922  6,252  6,332 
Other service charges 5,367  5,219  4,806  4,900  4,378 
Check clearing fees 1,885  1,778  1,869  2,340  2,562 
Revenue from loan sales and      
   securitizations (a) 8,638  8,386  11,114  14,151  22 
Miscellaneous revenue 19,258  14,146  18,498  19,499  17,865 
Total noninterest revenue 129,503  123,104  121,379  127,466  114,461 
       
Statistics      
Trust total assets (millions)(b)  12,495  12,208  12,164  12,228  12,327 
Trust total managed assets (millions)(b) 7,028  7,158  7,204  7,608  7,463 
Merchant transactions 46,164  46,309  42,701  39,347  40,480 
(a)  Includes gains from whole-loan sales and net revenue from asset securitizations
(b)  Current quarter is an estimate
Certain previously reported amounts have been reclassified to agree with current presentation.

7

MORTGAGE BANKING
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
Net interest income $41,688  $37,601  $32,957  $38,858  $37,758 
Noninterest income:      
  Net origination fees 115,541  95,676  99,964  76,567  68,375 
  Net servicing fees 17,951  6,295  13,765  15,382  25,560 
  Other fees 17,762  15,769  8,846  9,901  15,291 
Total noninterest income 151,254  117,740  122,575  101,850  109,226 
Total revenue 192,942  155,341  155,532  140,708  146,984 
Noninterest expense 131,031  112,568  108,630  105,451  105,237 
Provision               180                119                  40                 (15) - 
Pretax income 61,731  42,654  46,862  35,272  41,747 
         
Noninterest expense detail      
Commissions & incentives $86,471  $79,092  $59,020  66,255  59,732 
FAS 91 cost deferral 4,616  (1,332) (2,574) (6,315) 2,195 
Other salaries & benefits 60,779  59,332  57,402  63,100  54,497 
  Total salaries & benefits 151,866  137,092  113,848  123,040  116,424 
Contract labor & outsourcing  5,059  5,298  4,456  4,688  4,210 
Equipment & occupancy 16,554  16,786  15,600  16,837  17,717 
Foreclosure provision  3,063  (646) 2,414  2,418  1,757 
Other expenses  47,556  43,936  40,761  29,646  47,931 
Total expenses before FAS 91 reclass 224,098  202,466  177,079  176,629  188,039 
FAS 91 reclassification (97,429) (92,667) (70,808) (74,881) (86,706)
Total Noninterest Expense Before      
  Segment Allocations  126,669  109,799  106,271  101,748  101,333 
Segment Allocations 4,362  2,769  2,359  3,703  3,904 
 Total Noninterest Expense  131,031  112,568  108,630  105,451  105,237 
       
Other information      
Efficiency ratio 68% 72% 70% 75% 72%
       
Warehouse (millions) $4,583  $4,081  $3,522  $3,543  $3,217 
Other earning assets (millions) 394  391  343  318  287 
  Total earning assets (millions) 4,977  4,472  3,865  3,861  3,504 
       
Escrow balances 2,334  2,054  1,724  1,779  1,570 
       
Net interest margin 3.32% 3.37% 3.46% 4.00% 4.29%
       
Warehouse Spread 2.33% 2.66% 2.89% 3.58% 3.93%
                 
Certain previously reported amounts have been reclassified to agree with current presentation.

8

MORTGAGE BANKING
Quarterly, Unaudited
(Thousands)    3Q05   2Q05   1Q05   4Q04   3Q04 
ORIGINATION INCOME      
Origination Fees $104,395  $97,468  $76,050  $79,235  $82,425 
FAS 91 Fee Deferral             4,846             (3,774)              (939)            (3,192)             2,966 
Appraisal, Final Inspection,       
     Credit Report Fees             9,639              8,967              6,926              7,142              7,335 
  Total origination fees         118,880          102,661            82,037            83,185            92,726 
       
Secondary Marketing Income:      
OMSR          108,094            80,076            72,948            62,462            58,120 
SRP            14,940            13,629            10,426              7,709              8,656 
Marketing G/L (Trading Gains)             15,165            19,884            27,553            15,605            20,904 
Concessions          (39,810)          (27,319)          (21,944)          (15,360)          (25,724)
LOCOM                (4,299)              (588)              (248)            (2,153)               399 
  Total Secondary Marketing Fees -      
          Mortgage             94,090            85,682            88,735            68,263            62,355 
       
FAS 91 Reclassification          (97,429)          (92,667)          (70,808)          (74,881)          (86,706)
       
Total Origination Income         115,541            95,676            99,964            76,567            68,375 
       
KEY ORIGINATIONS METRICS      
       
Production ($ in millions):      
  First Lien Production           10,557              9,526              7,618              7,840              6,842 
       
Refinanced Production              4,387              3,545              3,588              3,475              2,117 
Refinanced % 42% 37% 47% 44% 31%
Purchased Production             6,170              5,981              4,030              4,365              4,725 
Purchased % 58% 63% 53% 56% 69%
       
ARMs % (Excluding Gov't ARMS) 41% 50% 45% 47% 48%
       
Total Sales Force 2,602  2,629  2,574  2,416  2,258 
       
Warehouse/Pipeline Balance:      
Ending Warehouse Balance 3,159  3,663  3,477  3,420  2,832 
Ending Pipeline Balance (Locked)             3,930              5,209              4,065              3,309              3,922 
       
Loan Sales (Deliveries):      
Total Loan Sales           10,563              8,738              7,380              7,134              6,529 
       
Margins:      
Marketing Margin on Deliveries (bps):      
OMSR 102  92  99  88  89 
Marketing G/L (Trading Gains) 14  23  37  22  32 
LOCOM                  (4)                  (1)                    -                   (3)                   1 
Concessions/SRP  (23) (16) (16) (11) (26)
Total Marketing Margin on Deliveries 89  98  120  96  96 
               
Certain previously reported amounts have been reclassified to agree with current presentation.

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MORTGAGE BANKING
Quarterly, Unaudited
     3Q05   2Q05   1Q05   4Q04   3Q04 
(Thousands)   $ bps $ bps $ bps $ bps $ bps
SERVICING INCOME                      
Gross Service Fees $88,866  38 $87,285  39 $85,908  39 $80,462  38 $75,279  39
Guarantee Fees     (18,900) (8)     (19,039) (9)     (19,127) (9)     (18,020) (9)     (17,022) (9)
Sub-Service Fee Income          101     -             40     -               4     -               2     -               7     - 
Lender Paid MI         (145)    -          (159)    -          (121)    -          (143)    -          (134)    - 
  Net Service Fees        69,922  30       68,127  30       66,664  30       62,301  29       58,130  30 
         
Early Payoff Interest Expense      (6,844)  (3)      (5,742)  (2)      (5,193)  (2)      (5,485)  (2)      (4,064)  (2)
Ancillary Fees       6,601  3        6,001  3        6,411  3        5,864  3        5,666  3 
  Total Service Fees        69,679  30       68,386  31       67,882  31       62,680  30       59,732  31 
         
AMORTIZATION/IMPAIRMENT        
Amortization     (47,873)       (45,808)     (46,915)     (41,639)     (38,111)  
Impairment            48        (23,545)     (10,375)      (9,489)     (13,356)  
  Total Amortization/Impairment       (47,825)       (69,353)       (57,290)       (51,128)       (51,467)  
         
HEDGE GAINS        
MSR Hedge Gains/(Losses)        
  NII on SWAPs       8,703         13,607       18,330       16,382       16,987   
  Hedge Ratios      11,259         16,092       11,013       15,481        8,648   
  Other Ineffectiveness     (13,793)       (10,391)     (11,843)     (13,342)      (1,701)  
    Total MSR Hedge Gains/(Losses)       6,169         19,308         17,500         18,521         23,934   
         
Time Decay of MSR Hedges      (9,831)        (9,513)      (9,984)     (12,129)      (7,637)  
         
Hedge MTM & Time Decay:        
  I/O Strip Time Decay         (367)        (2,092)      (3,257)      (1,874)      (1,246)  
  I/O Strip MTM          126            (441)      (1,086)         (688)       2,244   
    Total Hedge MTM & Time Decay         (241)        (2,533)        (4,343)        (2,562)            998   
Total Hedge Gains        (3,903)         7,262          3,173          3,830         17,295   
         
Total Servicing Income        17,951          6,295         13,765         15,382         25,560   
         
KEY SERVICING METRICS        
($ in millions)        
Avg. Servicing Portfolio (Owned) $92,235    $89,366  $87,397  $84,863  $76,885   
End. Servicing Portfolio (Owned) $93,589    $90,823  $88,010  $86,587  $81,591   
Average Loans Serviced (#)    610,895       599,361     598,997     583,248     539,527   
         
Product Mix (Average)         
Product Mix (%)        
GNMA 9%   10% 11% 12% 14%  
FNMA/FHLMC 67%   68% 69% 69% 68%  
Private   20%   18%   16%   15%   13%  
Sub-Total 96%   96% 96% 96% 95%  
Warehouse 4%   4% 4% 4% 5%  
Total   100%   100%   100%   100%   100%  
         
Other Statistics        
(Annualized)        
Ancillary Income per Loan $43.22    $40.05  $42.81  $40.22  $42.01   
Direct Servicing Cost per Loan $52.24    $52.08  $54.12  $56.88  $56.85   
         
Portfolio Data        
(in millions)        
Average Servicing Asset ** 1,106   1,062 1,049 971 947  
Valuation Reserve (Ending Balance) 1   6 3 4 7  
Servicing Book Value (bps)   120   119 120 114 123
         
Amortization/Average Servicing Asset 17%   17% 18% 17% 16%  
Impairment/Average Servicing Asset 0%   9% 4% 4% 6%  
         
Run-Off Rate 28%   25% 22% 26% 22%  
         
** Includes valuation reserve/MSRs only                  
Certain previously reported amounts have been reclassified to agree with current presentation.

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CAPITAL MARKETS
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
Net interest income ($ 7,826) ($ 9,490) ($ 5,179) $376  $1,416 
Noninterest income:      
  Fixed income 42,642  50,819  63,020  45,919  46,755 
  Other fees 43,599  49,399  33,407  34,164  34,600 
Total noninterest income 86,241  100,218  96,427  80,083  81,355 
Total revenue 78,415  90,728  91,248  80,459  82,771 
Noninterest expense 75,910  82,679  81,538  69,527  64,640 
Pretax income 2,505  8,049  9,710  10,932  18,131 
         
       
Efficiency ratio 97% 91% 89% 86% 78%
       
Trading inventory (millions) $2,158  $2,069  $2,235  $857  $719 
Other earning assets (millions) 2,512  2,493  1,964  715  669 
  Total earning assets (millions) 4,670  4,562  4,199  1,572  1,388 
       
       
Net interest margin -0.66% -0.83% -0.50% 0.10% 0.41%
       
                 

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CORPORATE
Quarterly, Unaudited
(Thousands)  3Q05   2Q05   1Q05   4Q04   3Q04 
Net interest income $2,035  $3,170  $2,402  ($ 4,168) $433 
Noninterest income 2,945  2,250  3,083  4,283  2,189 
Security G/L (406) 75  (66)            (3,733)           19,746 
Total revenue 4,574  5,495  5,419  (3,618) 22,368 
Total noninterest expense 16,875  15,984  11,819  10,874  11,451 
Pretax income (12,301) (10,489) (6,400) (14,492) 10,917 
                 

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CAPITAL HIGHLIGHTS
(Dollars in millions except per share amounts, Unaudited)
     3Q05  2Q05 1Q05 4Q04 3Q04
Tier 1 Capital (a) $  2,434.2  $  2,364.8  $  2,292.3  $  2,080.2  $  2,027.2 
Tier 2 Capital (a) 1,112.5  1,096.7  1,108.8  1,102.5  739.4 
  Total Capital (a) $  3,546.7  $  3,461.5  $  3,401.1  $  3,182.7  $  2,766.6 
     
Risk-Adjusted Assets (a) $28,567.7  $27,464.8  $25,736.7  $24,140.7  $22,505.2 
     
Tier 1 Ratio (a) 8.52% 8.61% 8.91% 8.62% 9.01%
Tier 2 Ratio (a)         3.90            3.99            4.30            4.56            3.28   
  Total Capital Ratio (a) 12.42% 12.60% 13.21% 13.18% 12.29%
     
Leverage Ratio (a) 6.46% 6.59% 6.80% 7.16% 7.38%
     
Shareholders' Equity/Assets Ratio (b)          5.74            5.79            5.97            6.73            6.87   
     
Book Value $ 17.78    $ 17.32    $ 16.73    $ 16.39    $ 15.96   
             
(a)  Current quarter is an estimate
(b)  Calculated on average balances

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NET INTEREST MARGIN (NIM) HIGHLIGHTS
(Unaudited)
         3Q05      2Q05     1Q05    4Q04     3Q04
Consolidated Yields and Rates:    
 Investment securities 4.30 % 4.33 % 4.27 % 4.21 % 4.36 %
 Loans, net of unearned          6.34              5.98              5.63              5.33              5.01    
 Loans held for sale          6.43              6.20              5.95              5.79              5.56    
 Capital markets securities inventory          5.01              4.39              4.39              3.64              3.73    
 Mortgage banking trading securities        12.82            12.63            12.68            12.60            12.11    
 Other earning assets          3.07              2.61              2.15              1.54              1.19    
 Yields on earning assets          5.90              5.56              5.29              5.22              4.95    
 Interest-bearing core deposits          2.13              1.92              1.73              1.56              1.43    
 CD's over $100,000          3.53              3.06              2.59              2.09              1.61    
 Fed funds purchased and repos          3.18              2.71              2.24              1.78              1.29    
 Commercial paper and other short-term    
    borrowings          3.62              3.18              2.68              2.15              1.83    
  Capital markets trading liabilities          5.54              5.20              4.64              3.65              4.00    
 Term borrowings          4.16              3.71              3.18              2.70              2.28    
 Rates paid on interest-bearing liabilities          3.31              2.90              2.49              1.99              1.63    
  Net interest spread          2.59              2.66              2.80              3.23              3.32    
 Effect of interest-free sources             .50               .40               .32               .34               .28    
  FHN - NIM   3.09 % 3.06 % 3.12 % 3.57 % 3.60 %
Certain previously reported amounts have been reclassified to agree with current presentation.

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