Business Segment Information

6 Months Ended

Jun. 30, 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 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 six months ended June 30:
	Three Months Ended				Six Months Ended
	June 30				June 30
(Dollars in thousands)	2012		2011		2012		2011
Consolidated
Net interest income	$	172,675	$	172,860	$	344,604	$	345,615
Provision for loan losses		15,000		1,000		23,000		2,000
Noninterest income		158,907		187,593		361,348		383,929
Noninterest expense		527,177		344,455		849,171		658,252
Income/(loss) before income taxes		(210,595)		14,998		(166,219)		69,292
Provision/(benefit) for income taxes		(88,178)		(4,167)		(77,608)		7,995
Income/(loss) from continuing operations		(122,417)		19,165		(88,611)		61,297
Income/(loss) from discontinued operations, net of tax		487		3,671		52		4,541
Net income/(loss)	$	(121,930)	$	22,836	$	(88,559)	$	65,838
Average assets	$	25,014,635	$	24,518,015	$	25,107,504	$	24,543,948

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

	Three Months Ended				Six Months Ended
	June 30				June 30
(Dollars in thousands)	2012		2011		2012		2011
Regional Banking
Net interest income	$	147,204	$	135,583	$	293,277	$	269,942
Provision/(provision credit) for loan losses		4,828		(13,748)		(2,598)		(26,152)
Noninterest income		64,838		67,853		124,739		134,174
Noninterest expense		142,428		143,346		281,787		291,140
Income/(loss) before income taxes		64,786		73,838		138,827		139,128
Provision/(benefit) for income taxes		23,362		27,075		50,375		50,968
Net income/(loss)	$	41,424	$	46,763	$	88,452	$	88,160
Average assets	$	12,354,917	$	11,113,268	$	12,292,457	$	11,095,675

Capital Markets
Net interest income	$	5,613	$	5,509	$	11,297	$	11,012
Noninterest income		74,964		77,925		181,739		168,005
Noninterest expense		60,886		103,383		141,188		176,946
Income/(loss) before income taxes		19,691		(19,949)		51,848		2,071
Provision/(benefit) for income taxes		7,421		(7,756)		19,661		650
Net income/(loss)	$	12,270	$	(12,193)	$	32,187	$	1,421
Average assets	$	2,384,449	$	2,259,309	$	2,367,635	$	2,160,843

Corporate
Net interest income/(expense)	$	(4,110)	$	412	$	(8,837)	$	81
Noninterest income		3,838		8,850		13,104		21,558
Noninterest expense		19,374		36,287		41,895		56,959
Income/(loss) before income taxes		(19,646)		(27,025)		(37,628)		(35,320)
Provision/(benefit) for income taxes		(12,922)		(18,917)		(24,727)		(29,537)
Net income/(loss)	$	(6,724)	$	(8,108)	$	(12,901)	$	(5,783)
Average assets	$	5,295,278	$	5,089,016	$	5,362,173	$	5,099,088

Non-Strategic
Net interest income	$	23,968	$	31,356	$	48,867	$	64,580
Provision for loan losses		10,172		14,748		25,598		28,152
Noninterest income		15,267		32,965		41,766		60,192
Noninterest expense		304,489		61,439		384,301		133,207
Income/(loss) before income taxes		(275,426)		(11,866)		(319,266)		(36,587)
Provision/(benefit) for income taxes		(106,039)		(4,569)		(122,917)		(14,086)
Income/(loss) from continuing operations		(169,387)		(7,297)		(196,349)		(22,501)
Income/(loss) from discontinued operations, net of tax		487		3,671		52		4,541
Net income/(loss)	$	(168,900)	$	(3,626)	$	(196,297)	$	(17,960)
Average assets	$	4,979,991	$	6,056,422	$	5,085,239	$	6,188,342

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