The following table provides the balance of loans by portfolio segment as of September 30, 2013 and 2012, and December 31, 2012:

		September 30				December 31
(Dollars in thousands)		2013		2012		2012
Commercial:
	Commercial, financial, and industrial	$	7,746,942	$	8,466,450	$	8,796,956
	Commercial real estate		1,173,711		1,229,855		1,168,235
Retail:
	Consumer real estate (a)		5,458,047		5,735,904		5,688,703
	Permanent mortgage (b)		697,694		805,511		765,583
	Credit card & other		332,162		286,063		289,105
Loans, net of unearned income		$	15,408,556	$	16,523,783	$	16,708,582
Allowance for loan losses			255,710		281,744		276,963
Total net loans		$	15,152,846	$	16,242,039	$	16,431,619

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

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 FHN 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 FHN'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, the trust preferred loans (“TRUPs”)(i.e., loans to bank and insurance-related businesses) portfolio and purchase credit impaired ("PCI") loans. 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, residential CRE and PCI loans. Retail loan portfolio segments include consumer real estate, permanent mortgage, and the credit card and other portfolio. Retail classes include HELOC, real estate (“R/E”) installment and PCI loans within the consumer real estate segment, permanent mortgage (which is both a segment and a class), and credit card and other.

On June 7, 2013, FHN acquired substantially all of the assets and liabilities of MNB from the FDIC. The acquisition included approximately $249 million of loans. These loans are recorded at fair value which incorporates expected credit losses in accordance with ASC 805 resulting in no carryover of allowance for loan loss from the acquiree. See Note 2 - Acquisitions and Divestitures for additional information regarding the acquisition. At acquisition, FHN designated certain loans as purchase credit impaired (see discussion below) with the remaining loans accounted for under ASC 310-20, "Nonrefundable Fees and Other Costs". For loans accounted for under ASC 310-20, the difference between the loans' book value to MNB and the estimated fair value at the time of the acquisition will be accreted back into interest income over the remaining contractual life and the subsequent accounting and reporting will be similar to FHN's originated loan portfolio.

ASC 310-30 "Accounting for Certain Loans or Debt Securities Acquired in a Transfer", provides guidance for acquired loans that have experienced deterioration of credit quality between origination and the time of acquisition and for which the timely collection of the interest and principal is no longer reasonably assured ("PCI loans"). PCI loans are initially recorded at fair value which was estimated by discounting expected cash flows at acquisition date. The expected cash flows includes all contractually expected amounts (including interest) and incorporates an estimate for future expected credit losses, pre-payment assumptions, and yield requirement for a market participant, among other things. To the extent possible, certain PCI loans were aggregated with composite interest rate and expectation of cash flows expected to be collected for the pool. Aggregation into loan pools is based on common risk characteristics that include similar credit risk or risk ratings, and one or more predominant risk characteristics. PCI pools are accounted for as a single unit.

Accretable yield is the excess of cash flows expected at acquisition over the initial investment in the loan and is recognized in interest income over the remaining life of the loan, or pool of loans. Nonaccretable difference is the difference between the contractually required payments at acquisition and the cash flows expected to be collected at acquisition. In quarters subsequent to the acquisition date, FHN re-estimates expected cash flows for PCI loans. Increases in expected cash flows from the last measurement will result in reversal of any nonaccretable difference (or allowance for loan losses to the extent any has been recorded) with a prospective positive impact on interest income. Decreases to the expected cash flows will result in an increase in the allowance for loan losses through increased provision expense. Generally, PCI loans will not be reported as nonperforming loans, troubled debt restructurings (if pooled), or impaired loans unless there has been an other-than-temporary decline in the fair value of a loan below amortized cost or if it is probable that a loan has become impaired in periods subsequent to the acquisition.

The following table reflects FHN's contractually required payments receivable, cash flows expected to be collected, and the fair value of purchase credit impaired ("PCI") loans at the acquisition date of June 7, 2013. The table has been revised from second quarter 2013 as the PCI population was finalized in third quarter 2013.

FHN has a concentration of loans secured by residential real estate (40 percent of total loans), the majority of which is in the consumer real estate portfolio (35 percent of total loans). Loans to finance and insurance companies total $1.6 billion (21 percent of the C&I portfolio, or 10 percent of the total loans). FHN had loans to mortgage companies totaling $0.7 billion (9 percent of the C&I portfolio, or 5 percent of total loans) as of September 30, 2013. As a result, 30 percent of the C&I category was sensitive to impacts on the financial services industry.

In first quarter 2012, the Office of the Comptroller of Currency ("OCC") issued interagency guidance related to ALLL estimation and nonaccrual practices, and risk management policies for junior lien loans. As a result, FHN modified its nonaccrual policies in first quarter 2012, to place current second liens on nonaccrual if the first lien is owned or serviced by FHN and is 90 or more days past due. For non FHN-serviced first liens, in second quarter 2013, FHN received information from a third party vendor regarding the performance status of those first liens and placed stand-alone second liens on nonaccrual if the first lien was 90 days or more past due or had been modified. Because probable incurred losses had been contemplated in the allowance for loan loss estimate in prior quarters, this new information did not result in a significant increase in the ALLL.

In third quarter 2012, the OCC clarified that residential real estate loans in which personal liability has been discharged through Chapter 7 bankruptcy and not reaffirmed by the borrower are collateral dependent and should be reported as nonaccruing troubled debt restructuring ("TDR"). As a result, FHN charged-down such loans to the net realizable value of the collateral and the remaining balances were reported as nonaccruing TDRs regardless of the loan's delinquency status. With the implementation of this guidance, provision expense increased by approximately $30 million and net charge-offs increased by $40.0 million in third quarter 2012.

Because of the composition of FHN's residential real estate portfolios, these changes most significantly impacted the consumer real estate portfolio segment. The level of nonperforming loans and TDRs in the consumer real estate and permanent mortgage portfolios was affected by the regulatory actions discussed above.

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 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 qualitative adjustments by management to reflect current events, trends, and conditions (including economic considerations and trends). The slow economic recovery, performance of the housing market, unemployment levels, the regulatory environment, regulatory guidance, and both positive and negative portfolio segment-specific trends, are examples of additional factors considered by management in determining the ALLL. The ALLL also includes reserves determined in accordance with ASC 310-10-35 for loans determined by management to be individually impaired.

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.

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.

Generally, classified nonaccrual commercial loans over $1 million and all commercial and consumer loans classified as TDRs are deemed to be impaired and are individually assessed for impairment measurement in accordance with ASC 310-10-35. PCI loans are not considered impaired loans unless there are declines in fair value in reporting periods subsequent to the acquisition date. 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 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 ALLL until such time as a loss is expected and recognized; for impaired collateral-dependent loans, FHN will charge off the full difference between the book value and the best estimate of net realizable value.

Generally, the allowance for TDRs in all consumer portfolio segments is determined by estimating the expected future 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 discount rates of variable rate TDRs are adjusted to reflect changes in the interest rate index in which the rates are tied. The discounted cash flows are then compared to the outstanding principal balance in order to determine required reserves. Residential real estate loans discharged through bankruptcy are collateral-dependent and are charged down to net realizable value.

The following table provides a rollforward of the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2013 and 2012:
				Commercial		Consumer		Permanent		Credit Card
(Dollars in thousands)		C&I		Real Estate		Real Estate		Mortgage		and Other			Total
Balance as of July 1, 2012		$	110,645	$	41,546	$	133,421	$	29,112	$	6,327	$	321,051
Charge-offs			(7,077)		(4,446)		(69,351)		(2,889)		(3,259)		(87,022)
Recoveries			1,892		1,240		2,941		734		908		7,715
Provision			1,081		(10,991)		48,938		(1,400)		2,372		40,000
Balance as of September 30, 2012			106,541		27,349		115,949		25,557		6,348		281,744
Balance as of January 1, 2012			130,413		55,586		165,077		26,194		7,081		384,351
Charge-offs			(23,310)		(18,070)		(132,618)		(10,597)		(9,238)		(193,833)
Recoveries			8,568		2,779		12,255		1,905		2,719		28,226
Provision			(9,130)		(12,946)		71,235		8,055		5,786		63,000
Balance as of September 30, 2012			106,541		27,349		115,949		25,557		6,348		281,744
Allowance - individually evaluated for impairment			28,672		183		31,629		20,988		237		81,709
Allowance - collectively evaluated for impairment			77,869		27,166		84,320		4,569		6,111		200,035
Loans, net of unearned as of September 30, 2012:
	Individually evaluated for impairment		153,480		66,357		145,481		129,101		913		495,332
	Collectively evaluated for impairment		8,312,970		1,163,498		5,590,423		676,410		285,150		16,028,451
Total loans, net of unearned			8,466,450		1,229,855		5,735,904		805,511		286,063		16,523,783
Balance as of July 1, 2013			93,502		13,931		120,848		27,103		6,550		261,934
Charge-offs			(4,869)		(515)		(16,412)		(1,366)		(2,884)		(26,046)
Recoveries			3,242		587		4,398		841		754		9,822
Provision			(495)		(3,010)		11,992		(1,022)		2,535		10,000
Balance as of September 30, 2013			91,380		10,993		120,826		25,556		6,955		255,710
Balance as of January 1, 2013			96,191		19,997		128,949		24,928		6,898		276,963
Charge-offs			(16,201)		(2,612)		(58,792)		(6,577)		(8,236)		(92,418)
Recoveries			9,839		2,703		14,932		1,609		2,082		31,165
Provision			1,551		(9,095)		35,737		5,596		6,211		40,000
Balance as of September 30, 2013			91,380		10,993		120,826		25,556		6,955		255,710
Allowance - individually evaluated for impairment			15,702		1,581		38,426		18,646		212		74,567
Allowance - collectively evaluated for impairment			75,678		9,412		82,400		6,910		6,743		181,143
Loans, net of unearned as of September 30, 2013:
	Individually evaluated for impairment		102,729		30,266		170,401		144,036		648		448,080
	Collectively evaluated for impairment		7,641,803		1,098,002		5,286,752		553,658		331,497		14,911,712
	Purchased credit impaired loans		2,410		45,443		894		-		17		48,764
Total loans, net of unearned		$	7,746,942	$	1,173,711	$	5,458,047	$	697,694	$	332,162	$	15,408,556

Impaired Loans

The following tables provide information at September 30, 2013 and 2012, by class related to individually impaired loans and consumer TDR's. 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. For purposes of this disclosure, PCI loans and LOCOM have been excluded.

								Three Months Ended				Nine Months Ended
		At September 30, 2013						September 30, 2013				September 30, 2013
				Unpaid				Average		Interest		Average		Interest
		Recorded		Principal		Related		Recorded		Income		Recorded		Income
(Dollars in thousands)		Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
Impaired loans with no related allowance recorded:
Commercial:
	General C&I	$	34,193	$	43,677	$	-	$	40,812	$	-	$	51,845	$	108
	TRUPs		6,500		6,500		-		6,500		-		10,583		-
	Income CRE		12,939		24,219		-		17,959		-		24,828		168
	Residential CRE		0		182		-		5,483		-		10,860		122
	Total	$	53,632	$	74,578	$	-	$	70,754	$	-	$	98,116	$	398
Retail:
	HELOC (a)	$	18,323	$	40,867	$	-	$	19,016	$	-	$	20,032	$	-
	R/E installment loans (a)		11,632		15,102		-		11,913		-		12,166		-
	Permanent mortgage (a)		14,531		14,531		-		14,663		-		14,168		-
	Total	$	44,486	$	70,500	$	-	$	45,592	$	-	$	46,366	$	-
Impaired loans with related allowance recorded:
Commercial:
	General C&I	$	31,672	$	38,075	$	2,447	$	27,944	$	71	$	16,319	$	108
	TRUPs		33,610		33,610		13,255		38,655		-		39,185		-
	Income CRE		10,274		11,330		765		7,552		70		3,859		96
	Residential CRE		7,053		12,383		816		4,567		68		1,869		84
	Total	$	82,609	$	95,398	$	17,283	$	78,718	$	209	$	61,232	$	288
Retail:
	HELOC	$	68,903	$	71,708	$	15,702	$	68,287	$	483	$	65,005	$	1,373
	R/E installment loans		71,543		72,686		22,724		75,084		336		72,571		1,025
	Permanent mortgage		129,505		129,702		18,646		127,187		776		124,421		2,164
	Credit card & other		648		648		212		682		7		732		23
	Total	$	270,599	$	274,744	$	57,284	$	271,240	$	1,602	$	262,729	$	4,585
Total commercial		$	136,241	$	169,976	$	17,283	$	149,472	$	209	$	159,348	$	686
Total retail		$	315,085	$	345,244	$	57,284	$	316,832	$	1,602	$	309,095	$	4,585
Total impaired loans		$	451,326	$	515,220	$	74,567	$	466,304	$	1,811	$	468,443	$	5,271

								Three Months Ended				Nine Months Ended
		September 30, 2012						September 30, 2012				September 30, 2012
				Unpaid				Average		Interest		Average		Interest
		Recorded		Principal		Related		Recorded		Income		Recorded		Income
(Dollars in thousands)		Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
Impaired loans with no related allowance recorded:
Commercial:
	General C&I	$	59,215	$	75,587	$	-	$	60,669	$	142	$	67,098	$	549
	TRUPs		45,892		45,892		-		46,446		-		46,446		-
	Income CRE		44,956		69,684		-		48,166		96		56,305		249
	Residential CRE		19,993		36,108		-		21,167		70		22,142		204
	Total	$	170,056	$	227,271	$	-	$	176,448	$	308	$	191,991	$	1,002
Retail:
	HELOC (a)	$	13,086	$	40,222	$	-	$	142	$	-	$	48	$	-
	R/E installment loans (a)		8,696		24,263		-		95		-		32		-
	Permanent mortgage (a)		13,282		17,040		-		144		-		48		-
	Total	$	35,064	$	81,525	$	-	$	381	$	-	$	128	$	-
Impaired loans with related allowance recorded:
Commercial:
	General C&I	$	20,580	$	22,374	$	7,351	$	19,764	$	33	$	17,512	$	100
	TRUPs		33,700		33,700		21,321		33,700		-		33,700		-
	Income CRE		1,408		1,408		183		1,469		14		1,815		43
	Residential CRE		-		-		-		8,700		-		10,577		-
	Total	$	55,688	$	57,482	$	28,855	$	63,633	$	47	$	63,604	$	143
Retail:
	HELOC	$	57,020	$	57,422	$	12,980	$	57,097	$	389	$	53,469	$	1,173
	R/E installment loans		66,679		67,053		18,649		67,272		294		68,444		835
	Permanent mortgage		115,819		115,880		20,988		117,679		714		94,442		2,104
	Credit card & other		913		913		237		923		2		1,015		23
	Total	$	240,431	$	241,268	$	52,854	$	242,971	$	1,399	$	217,370	$	4,135
Total commercial		$	225,744	$	284,753	$	28,855	$	240,081	$	355	$	255,595	$	1,145
Total retail		$	275,495	$	322,793	$	52,854	$	243,352	$	1,399	$	217,498	$	4,135
Total impaired loans		$	501,239	$	607,546	$	81,709	$	483,433	$	1,754	$	473,093	$	5,280

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 using 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. 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 annually or earlier 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 with associated allowance, disaggregated by PD grade as of September 30, 2013 and 2012:
	September 30, 2013
			Loans to													Allowance
	General		Mortgage				Income		Residential					Percentage		for Loan
(Dollars in thousands)	C&I		Companies		TRUPS (a)		CRE		CRE		Total			of Total		Losses
PD Grade:
1	$	228,555	$	-	$	-	$	-	$	-	$	228,555		3	%	$	81
2		179,955		-		-		-		-		179,955		2			79
3		194,880		-		-		2,687		-		197,567		2			224
4		311,097		-		-		-		-		311,097		4			517
5		790,748		-		-		11,823		216		802,787		9			1,363
6		938,609		40,200		-		44,311		286		1,023,406		12			1,973
7		1,125,031		202,128		-		228,814		9,978		1,565,951		17			3,377
8		881,668		308,282		-		202,417		5,058		1,397,425		16			4,895
9		615,180		152,275		-		203,308		1,499		972,262		11			7,981
10		451,318		29,008		-		139,026		1,066		620,418		7			8,640
11		399,082		473		-		69,945		277		469,777		5			10,338
12		124,916		-		-		57,534		1,224		183,674		2			2,425
13		159,675		-		332,707		33,439		1,324		527,145		6			8,596
14,15,16		172,346		335		3,335		73,737		10,033		259,786		3			34,601
Collectively evaluated for impairment		6,573,060		732,701		336,042		1,067,041		30,961		8,739,805		99			85,090
Individually evaluated for impairment		65,865		-		36,864		23,213		7,053		132,995		1			17,283
Total commercial loans	$	6,638,925	$	732,701	$	372,906	$	1,090,254	$	38,014	$	8,872,800	(b)	100	%	$	102,373

	September 30, 2012
			Loans to												Allowance
	General		Mortgage				Income		Residential				Percent of		for Loan
(Dollars in thousands)	C&I		Companies		TRUPS (a)		CRE		CRE		Total		Total		Losses
PD Grade:
1	$	213,872	$	-	$	-	$	-	$	-	$	213,872	2	%	$	54
2		183,044		-		-		2,557		-		185,601	2			93
3		129,183		-		-		8,210		-		137,393	1			79
4		255,875		-		-		5,660		26		261,561	3			226
5		500,389		-		-		28,115		117		528,621	6			1,027
6		899,007		129,816		-		166,183		5,024		1,200,030	12			3,002
7		997,337		327,812		-		156,309		4,056		1,485,514	15			7,868
8		936,437		959,623		-		172,200		515		2,068,775	21			12,028
9		651,137		186,130		-		172,544		1,375		1,011,186	10			10,084
10		508,520		33,302		-		96,892		1,336		640,050	7			8,103
11		462,654		-		-		84,635		2,024		549,313	6			9,112
12		175,688		-		-		11,848		1,278		188,814	2			2,709
13		154,787		-		338,177		75,408		3,705		572,077	6			9,211
14,15,16		270,180		-		-		133,941		29,540		433,661	5			41,439
Collectively evaluated for impairment		6,338,110		1,636,683		338,177		1,114,502		48,996		9,476,468	98			105,035
Individually evaluated for impairment		79,795		-		73,685		46,364		19,993		219,837	2			28,855
Total commercial loans	$	6,417,905	$	1,636,683	$	411,862	$	1,160,866	$	68,989	$	9,696,305	100	%	$	133,890
Certain previously reported amounts have been reclassified to agree with current presentation.

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 indicators of asset quality within the credit card and other retail portfolio.

The following tables reflect period-end balances and average FICO scores by origination vintage for the HELOC, real estate installment, and permanent mortgage classes of loans as of September 30, 2013 and 2012:

HELOC
(Dollars in thousands)	September 30, 2013						September 30, 2012
			Average		Average				Average		Average
	Period End		Origination		Refreshed		Period End		Origination		Refreshed
Origination Vintage	Balance		FICO		FICO		Balance		FICO		FICO
pre-2003	$	88,416		711		702	$	135,605		718		710
2003		163,576		728		714		235,546		733		724
2004		421,542		727		717		514,791		728		718
2005		548,756		733		720		642,027		734		719
2006		400,023		741		725		474,706		741		726
2007		421,964		744		728		498,011		745		729
2008		233,642		754		747		267,346		755		748
2009		121,555		750		744		152,687		753		748
2010		120,022		753		750		150,243		754		752
2011		119,553		758		754		146,768		759		758
2012		145,507		759		759		117,905		761		759
2013		111,976		762		761		-		-		-
Total	$	2,896,532		741		730	$	3,335,635		740		731


R/E Installment Loans	September 30, 2013						September 30, 2012
(Dollars in thousands)			Average		Average				Average		Average
	Period End		Origination		Refreshed		Period End		Origination		Refreshed
Origination Vintage	Balance		FICO		FICO		Balance		FICO		FICO
pre-2003	$	26,603		682		684	$	41,783		686		686
2003		81,915		716		725		122,330		721		730
2004		58,244		701		699		78,439		707		706
2005		170,742		717		711		224,780		718		713
2006		183,847		716		701		244,101		719		703
2007		264,851		725		709		338,306		728		711
2008		91,883		723		720		122,014		728		720
2009		39,549		742		736		67,590		748		744
2010		131,004		747		754		163,618		745		751
2011		347,315		761		761		428,167		760		759
2012		707,972		764		764		569,141		765		761
2013		457,590		758		754		-		-		-
Total	$	2,561,515		746		742	$	2,400,269		741		733

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 payments, but there are atypical loan structures or other borrower-specific issues. PCI loans are classified in the table below as accruing. FHN has a meaningful portion of loans that are classified as nonaccrual even though loan payments are being received; these include residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy, and also current second lien loans behind first lien loans with performance issues. 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 real estate loan on nonaccrual status if it is 30 or more days delinquent at the time of modification and is determined to be a TDR, except for residential real estate secured loans discharged in bankruptcy (“discharged bankruptcies”) that are placed on nonaccrual regardless of delinquency status. Stand-alone second liens are placed on nonaccrual status if they are behind first liens that are 90 days or more past due or the first lien has been modified.

The following table reflects accruing and non-accruing loans by class on September 30, 2013:

	Accruing								Non-Accruing
			30-89		90+						30-89		90+		Total
			Days		Days		Total				Days		Days		Non-		Total
(Dollars in thousands)	Current		Past Due		Past Due		Accruing		Current		Past Due		Past Due		Accruing		Loans
Commercial (C&I):
General C&I	$	6,565,838	$	7,314	$	247	$	6,573,399	$	33,582	$	3,610	$	28,334	$	65,526	$	6,638,925
Loans to mortgage companies		731,684		682		-		732,366		-		-		335		335		732,701
TRUPs (a)		336,042		-		-		336,042		-		-		36,864		36,864		372,906
Purchased credit impaired loans		1,942		468		-		2,410		-		-		-		-		2,410
Total commercial (C&I)		7,635,506		8,464		247		7,644,217		33,582		3,610		65,533		102,725		7,746,942
Commercial real estate:
Income CRE		1,063,940		5,438		283		1,069,661		6,791		-		13,802		20,593		1,090,254
Residential CRE		33,442		177		-		33,619		285		-		4,110		4,395		38,014
Purchased credit impaired loans		44,241		637		565		45,443		-		-		-		-		45,443
Total commercial real estate		1,141,623		6,252		848		1,148,723		7,076		-		17,912		24,988		1,173,711
Consumer real estate:
HELOC		2,778,336		24,072		12,641		2,815,049		61,733		5,521		14,229		81,483		2,896,532
R/E installment loans		2,499,516		14,156		6,475		2,520,147		29,549		3,048		7,877		40,474		2,560,621
Purchased credit impaired loans		894		-		-		894		-		-		-		-		894
Total consumer real estate		5,278,746		38,228		19,116		5,336,090		91,282		8,569		22,106		121,957		5,458,047
Permanent mortgage		643,385		5,097		12,239		660,721		13,518		1,321		22,134		36,973		697,694
Credit card & other
Credit card		186,749		1,480		1,258		189,487		-		-		-		-		189,487
Other		140,318		803		138		141,259		1,399		-		-		1,399		142,658
Purchased credit impaired loans		17		-		-		17		-		-		-		-		17
Total credit card & other		327,084		2,283		1,396		330,763		1,399		-		-		1,399		332,162
Total loans, net of unearned	$	15,026,344	$	60,324	$	33,846	$	15,120,514	$	146,857	$	13,500	$	127,685	$	288,042	$	15,408,556

The following table reflects accruing and non-accruing loans by class on September 30, 2012:

	Accruing								Non-Accruing
			30-89		90+						30-89		90+		Total
			Days		Days		Total				Days		Days		Non-		Total
(Dollars in thousands)	Current		Past Due		Past Due		Accruing		Current		Past Due		Past Due		Accruing		Loans
Commercial (C&I):
General C&I	$	6,315,340	$	25,221	$	428	$	6,340,989	$	36,480	$	9,734	$	30,702	$	76,916	$	6,417,905
Loans to mortgage companies		1,636,683		-		-		1,636,683		-		-		-		-		1,636,683
TRUPs (a)		338,177		-		-		338,177		-		-		73,685		73,685		411,862
Total commercial (C&I)		8,290,200		25,221		428		8,315,849		36,480		9,734		104,387		150,601		8,466,450
Commercial real estate:
Income CRE		1,111,616		2,393		-		1,114,009		10,552		3,689		32,616		46,857		1,160,866
Residential CRE		51,288		823		-		52,111		1,654		126		15,098		16,878		68,989
Total commercial real estate		1,162,904		3,216		-		1,166,120		12,206		3,815		47,714		63,735		1,229,855
Consumer real estate:
HELOC		3,246,585		36,223		18,774		3,301,582		20,990		1,195		11,868		34,053		3,335,635
R/E installment loans		2,350,465		18,332		10,185		2,378,982		12,954		2,470		5,863		21,287		2,400,269
Total consumer real estate		5,597,050		54,555		28,959		5,680,564		33,944		3,665		17,731		55,340		5,735,904
Permanent mortgage		748,470		15,241		7,774		771,485		18,165		2,095		13,766		34,026		805,511
Credit card & other
Credit card		183,893		1,666		1,352		186,911		-		-		-		-		186,911
Other		96,245		594		477		97,316		1,835		1		-		1,836		99,152
Total credit card & other		280,138		2,260		1,829		284,227		1,835		1		-		1,836		286,063
Total loans, net of unearned	$	16,078,762	$	100,493	$	38,990	$	16,218,245	$	102,630	$	19,310	$	183,598	$	305,538	$	16,523,783

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.

For all classes within the commercial portfolio segment, TDRs are typically modified through forbearance agreements (generally 6 to 12 months). Forbearance agreements could include reduced interest rates, reduced payments, release of guarantor in exchange for payment, 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 Program (“HAMP”). Within the HELOC and R/E installment loans 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. Permanent mortgage TDRs are typically modified by reducing the interest rate (in increments of 25 basis points to a minimum of 2 percent for up to 5 years) and a possible maturity date extension to reach an affordable housing debt ratio. After 5 years the interest rate steps up 1 percent every year thereafter until it reaches the Federal Home Loan Mortgage Corporation ("Freddie Mac," "Freddie," or "FHLMC") Weekly Survey Rate cap. Contractual maturities may be extended to 40 years on permanent mortgages and to 30 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 September 30, 2013 and 2012, FHN had $385.3 million and $371.4 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $61.3 million and $60.0 million, or 16 percent as of September 30, 2013 and 2012. Additionally, FHN had restructured $193.0 million and $171.9 million of loans held-for-sale as of September 30, 2013 and 2012, respectively. Loans held-for-sale are presented at UPB before fair value adjustments and do not carry reserves.

The following tables reflect portfolio loans (excluding acquired loans) that were classified as TDRs during the three and nine months ended September 30, 2013 and 2012:

		Three Months Ended September 30, 2013					Nine Months Ended September 30, 2013
			Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
			Outstanding		Outstanding			Outstanding		Outstanding
(Dollars in thousands)		Number	Recorded Investment		Recorded Investment		Number	Recorded Investment		Recorded Investment
Commercial (C&I):
General C&I		2	$	1,161	$	1,134	10	$	17,350	$	17,313
	Total commercial (C&I)	2		1,161		1,134	10		17,350		17,313
Commercial real estate:
Income CRE		-		-		-	1		288		288
Residential CRE		-		-		-	-		-		-
	Total commercial real estate	-		-		-	1		288		288
Consumer real estate:
HELOC		72		5,212		5,194	279		21,729		21,479
R/E installment loans		70		4,589		4,541	346		24,264		24,100
	Total consumer real estate	142		9,801		9,735	625		45,993		45,579
Permanent mortgage		15		3,864		4,074	41		16,907		17,311
Credit card & other		13		44		39	41		198		187
Total troubled debt restructurings		172	$	14,870	$	14,982	718	$	80,736	$	80,678

		Three Months Ended September 30, 2012					Nine Months Ended September 30, 2012
			Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
			Outstanding		Outstanding			Outstanding		Outstanding
(Dollars in thousands)		Number	Recorded Investment		Recorded Investment		Number	Recorded Investment		Recorded Investment
Commercial (C&I):
General C&I		8	$	4,285	$	4,244	19	$	22,406	$	22,264
	Total commercial (C&I)	8		4,285		4,244	19		22,406		22,264
Commercial real estate:
Income CRE		3		4,538		4,144	9		13,045		12,502
Residential CRE		-		-		-	2		88		87
	Total commercial real estate	3		4,538		4,144	11		13,133		12,589
Consumer real estate:
HELOC		737		17,087		16,916	831		27,730		27,511
R/E installment loans		567		13,604		13,445	677		26,782		25,710
	Total consumer real estate	1,304		30,691		30,361	1,508		54,512		53,221
Permanent mortgage		61		16,641		16,648	123		66,308		66,710
Credit card & other		26		101		97	188		1,063		1,025
Total troubled debt restructurings		1,402	$	56,256	$	55,494	1,849	$	157,422	$	155,809

The following table presents TDRs which were re-defaulted during the three and nine months ended September 30, 2013 and 2012, and as to which the modification occurred 12 months or less prior to the re-default. Financing receivables that became classified 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 were in default during the period and then determining whether they were modified within the 12 months prior to the default. For purposes of this disclosure, FHN generally defines payment default as a loan being 30 plus days past due.

		Three Months Ended			Nine Months Ended
		September 30, 2013			September 30, 2013
			Recorded			Recorded
(Dollars in thousands)		Number	Investment		Number	Investment
Commercial (C&I):
General C&I		6	$	1,870	8	$	5,977
	Total commercial (C&I)	6		1,870	8		5,977
Commercial real estate:
Income CRE		3		750	4		1,548
Residential CRE		-		-	1		33
	Total commercial real estate	3		750	5		1,581
Consumer real estate:
HELOC		1		35	10		512
R/E installment loans		3		229	6		350
	Total consumer real estate	4		264	16		862
Permanent mortgage		4		2,071	14		6,507
Credit card & other		8		34	15		61
Total troubled debt restructurings		25	$	4,989	58	$	14,988

		Three Months Ended			Nine Months Ended
		September 30, 2012			September 30, 2012
			Recorded			Recorded
(Dollars in thousands)		Number	Investment		Number	Investment
Commercial (C&I):
General C&I		9	$	8,559	27	$	21,618
	Total commercial (C&I)	9		8,559	27		21,618
Commercial real estate:
Income CRE		9		10,396	19		18,840
Residential CRE		1		73	3		259
	Total commercial real estate	10		10,469	22		19,099
Consumer real estate:
HELOC		15		1,749	31		3,379
R/E installment loans		4		210	33		3,392
	Total consumer real estate	19		1,959	64		6,771
Permanent mortgage		6		2,743	9		3,515
Credit card & other		4		17	19		69
Total troubled debt restructurings		48	$	23,747	141	$	51,072

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 real estate 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.