Business Segment Information

9 Months Ended

Sep. 30, 2011

Business Segment Information [Abstract]

Business Segment Information

Note 11 – Business Segment Information

Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses among segments which could change historical segment results. In third quarter 2011, FHN sold First Horizon Msaver, Inc ("Msaver"), the former subsidiary of First Tennessee Bank, which provided administrative services for health savings accounts. In first quarter 2011, FHN agreed to sell First Horizon Insurance, Inc. ("FHI"), the former subsidiary of First Tennessee Bank, which provided property and casualty insurance to customers in over 40 states, and Highland Capital Management Corporation ("Highland"), the former subsidiary of First Horizon National Corporation, which provided asset management services. The results of operations for these divested businesses have been included in the Income/(loss) from discontinued operations, net of tax line on the Consolidated Condensed Statements of Income for all periods presented. Consistent with historical practice, these businesses were moved to the non-strategic segment with other exited businesses and discontinued products. For comparability, previously reported items have been revised to reflect these changes. The divestiture of Msavers closed in third quarter 2011, and the divestitures of FHI and Highland closed in second quarter 2011.

FHN has four business segments: regional banking, capital markets, corporate, and non-strategic. The regional banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers in Tennessee and surrounding markets. Regional banking provides investments, financial planning, trust services and asset management, credit card, cash management, and first lien mortgage originations within the Tennessee footprint. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking related services to other financial institutions. The capital markets segment consists of fixed income sales, trading, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory, and derivative sales. The corporate segment consists of gains on the extinguishment of debt, unallocated corporate expenses, expense on subordinated debt issuances and preferred stock, 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, low income housing investment activities, and various charges related to restructuring, repositioning, and efficiency. The non-strategic segment consists of the wind-down national consumer and construction lending activities, legacy mortgage banking elements including servicing fees, 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 along with the associated restructuring, repositioning, and efficiency charges.

Total revenue, expense, and asset 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, they are to an extent subjective. This assignment and allocation has been consistently applied for all periods presented. The following table reflects the amounts of consolidated revenue, expense, tax, and assets for each segment for the three and nine month periods ended September 30:

	Three Months Ended September 30					Nine Months Ended September 30
(Dollars in thousands)	2011		2010			2011		2010
Consolidated
Net interest income		$176,340		$186,143			$521,955		$548,602
Provision for loan losses		32,000		50,000			34,000		225,000
Noninterest income		220,887		242,705			604,816		727,560
Noninterest expense		322,708		341,490			980,960		1,013,515
Income before income taxes		42,519		37,358			111,811		37,647
Provision/(benefit) for income taxes		8,367		3,290			16,362		(14,546	)
Income from continuing operations		34,152		34,068			95,449		52,193
Income/(loss) from discontinued operations, net of tax		4,828		(358	)		9,369		(7,897	)
Net income		$38,980		$33,710			$104,818		$44,296
Average assets		$24,778,116		$25,757,640			$24,622,862		$25,639,935

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

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in thousands)	2011			2010			2011			2010
Regional Banking
Net interest income		$140,603			$142,220			$411,523			$412,708
Provision for loan losses		(22,698	)		10,298			(48,850	)		90,294
Noninterest income		67,952			71,970			201,805			215,206
Noninterest expense		137,300			152,173			428,454			455,895
Income before income taxes		93,953			51,719			233,724			81,725
Provision for income taxes		34,739			18,822			85,955			29,380
Net income		$59,214			$32,897			$147,769			$52,345
Average assets		$11,432,091			$11,462,479			$11,188,037			$11,326,546
Capital Markets
Net interest income		$5,555			$8,584			$16,695			$15,772
Noninterest income		99,505			114,055			267,510			329,615
Noninterest expense		77,163			79,434			254,099			241,376
Income before income taxes		27,897			43,205			30,106			104,011
Provision for income taxes		10,659			16,214			11,361			38,980
Net income		$17,238			$26,991			$18,745			$65,031
Average assets		$2,343,696			$2,347,810			$2,215,467			$2,103,658
Corporate
Net interest income/(expense)		$(463	)		$(2,845)			$(288)			$3,825
Noninterest income		38,058			7,943			59,936			37,775
Noninterest expense		19,013			19,413			75,973			51,735
Income/(loss) before income taxes		18,582			(14,315	)		(16,325	)		(10,135	)
Provision/(benefit) for income taxes		666			(15,449	)		(28,711	)		(30,925	)
Net income		$17,916			$1,134			$12,386			$20,790
Average assets		$5,123,288			$4,980,852			$5,106,530			$4,826,606
Non-Strategic
Net interest income		$30,645			$38,184			$94,025			$116,297
Provision for loan losses		54,698			39,702			82,850			134,706
Noninterest income		15,372			48,737			75,565			144,964
Noninterest expense		89,232			90,470			222,434			264,509
Loss before income taxes		(97,913	)		(43,251	)		(135,694	)		(137,954	)
Benefit for income taxes		(37,697	)		(16,297	)		(52,243	)		(51,981	)
Loss from continuing operations		(60,216	)		(26,954	)		(83,451	)		(85,973	)
Income/(loss) from discontinued operations, net of tax		4,828			(358	)		9,369			(7,897	)
Net loss		$(55,388	)		$(27,312	)		$(74,082	)		$(93,870	)
Average assets		$5,879,041			$6,966,499			$6,112,828			$7,383,125

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