Business Segment Information

3 Months Ended

Mar. 31, 2012

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 2011, FHN sold First Horizon Insurance, Inc. ("FHI"), the former subsidiary of First Tennessee Bank which provided property and casualty insurance to customers in over 40 states, Highland Capital Management Corporation ("Highland"), the former subsidiary of First Horizon National Corporation which provided asset management services, and First Horizon Msaver, Inc. ("Msaver), the former subsidiary of First Tennessee Bank which provided administrative services for health savings accounts. 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.

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, 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 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 months ended March 31:

	Three Months Ended
	March 31
(Dollars in thousands)	2012			2011
Consolidated
Net interest income	$	171,929		$	172,755
Provision for loan losses		8,000			1,000
Noninterest income		202,441			196,335
Noninterest expense		321,994			313,796
Income/(loss) before income taxes		44,376			54,294
Provision/(benefit) for income taxes		10,570			12,162
Income/(loss) from continuing operations		33,806			42,132
Income/(loss) from discontinued operations, net of tax		(435	)		871
Net income/(loss)	$	33,371		$	43,003
Average assets	$	25,200,373		$	24,570,170

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

	Three Months Ended
	March 31
(Dollars in thousands)	2012			2011
Regional Banking
Net interest income	$	146,554		$	134,771
Provision/(provision credit) for loan losses		(7,426	)		(12,404	)
Noninterest income		59,901			66,319
Noninterest expense		139,359			147,794
Income/(loss) before income taxes		74,522			65,700
Provision/(benefit) for income taxes		27,199			24,051
Net income/(loss)	$	47,323		$	41,649
Average assets	$	12,182,128		$	11,032,101
Capital Markets
Net interest income	$	5,684		$	5,503
Noninterest income		106,775			90,080
Noninterest expense		80,302			73,563
Income/(loss) before income taxes		32,157			22,020
Provision/(benefit) for income taxes		12,240			8,406
Net income/(loss)	$	19,917		$	13,614
Average assets	$	2,350,821		$	2,061,282
Corporate
Net interest income/(expense)	$	(4,727	)	$	(332	)
Noninterest income		9,266			12,708
Noninterest expense		22,521			20,665
Income/(loss) before income taxes		(17,982	)		(8,289	)
Provision/(benefit) for income taxes		(11,805	)		(10,617	)
Net income/(loss)	$	(6,177	)	$	2,328
Average assets	$	5,429,068		$	5,109,272
Non-Strategic
Net interest income	$	24,418		$	32,813
Provision for loan losses		15,426			13,404
Noninterest income		26,499			27,228
Noninterest expense		79,812			71,774
Income/(loss) before income taxes		(44,321	)		(25,137	)
Provision/(benefit) for income taxes		(17,064	)		(9,678	)
Income/(loss) from continuing operations		(27,257	)		(15,459	)
Income/(loss) from discontinued operations, net of tax		(435	)		871
Net income/(loss)	$	(27,692	)	$	(14,588	)
Average assets	$	5,238,356		$	6,367,515

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