The following table provides the balance of loans by portfolio segment as of March 31, 2014 and 2013, and December 31, 2013:

		March 31				December 31
(Dollars in thousands)		2014		2013		2013
Commercial:
	Commercial, financial, and industrial	$	7,752,995	$	8,091,186	$	7,923,576
	Commercial real estate		1,152,418		1,115,879		1,133,279
Retail:
	Consumer real estate (a)		5,258,014		5,590,180		5,333,371
	Permanent mortgage (b)		622,242		793,282		662,242
	Credit card & other		333,792		299,143		336,606
Loans, net of unearned income		$	15,119,461	$	15,889,670	$	15,389,074
Allowance for loan losses			247,246		265,218		253,809
Total net loans		$	14,872,215	$	15,624,452	$	15,135,265

The loan portfolio is disaggregated into segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity 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. long-term unsecured loans to bank and insurance - related businesses) portfolio and purchased 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.

FHN has a concentration of loans secured by residential real estate (39 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 11 percent of the total loans). FHN had loans to mortgage companies, 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, totaling $0.7 billion (9 percent of the C&I portfolio, or 5 percent of total loans) as of March 31, 2014. As a result, 30 percent of the C&I category was sensitive to impacts on the financial services industry.

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 were initially recorded at fair value which incorporates expected credit losses, among other things, in accordance with ASC 805 resulting in no carryover of allowance for loan loss from the acquiree. At acquisition, FHN designated certain loans as purchased 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"). FHN considered several factors when determining whether a loan met the definition of a PCI loan at the time of acquisition including accrual status, loan grade, delinquency trends, prior partial charge-offs, as well as both originated versus refreshed credit scores and ratios when available.

PCI loans were initially recorded at fair value which was estimated by discounting expected cash flows at acquisition date. The expected cash flow 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 into pools with composite interest rate and 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. Generally, FHN pooled loans with smaller balances and common internal loan grades and portfolio types. Subsequent to the initial accounting at acquisition, each PCI pool is 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. FHN estimates expected cash flows for PCI loans on a quarterly basis. 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.

FHN does not report PCI loans as nonperforming loans due to the accretion of interest income. Additionally, PCI loans that have been pooled and subsequently modified will not be reported as troubled debt restructurings since the pool is the unit of measurement.

The following table presents a rollforward of the accretable yield for the three months ended March 31, 2014:

	Three Months Ended
(Dollars in thousands)	March 31, 2014
Balance, beginning of period	$	13,490
Additions		111
Accretion		(1,657)
Adjustment for payoffs		(233)
Adjustment for charge-offs		(64)
Increase in accretable yield (a)		4,181
Balance, end of period	$	15,828

At March 31, 2014, the ALLL related to PCI loans was $1.9 million and loan loss provision recognized during the three months ended March 31, 2014 was $1.2 million. The following table reflects the outstanding principal balance and carrying amounts of the acquired PCI loans as of March 31, 2014 and December 31, 2013:

	March 31, 2014				December 31, 2013
(Dollars in thousands)	Carrying value		Unpaid balance		Carrying value		Unpaid balance
Commercial, financial and industrial	$	6,693	$	8,503	$	7,077	$	9,169
Commercial real estate		37,067		52,690		38,042		53,648
Consumer real estate		693		973		878		1,291
Credit card and other		-		-		12		21
Total	$	44,453	$	62,166	$	46,009	$	64,129

Impaired Loans

The following tables provide information at March 31, 2014 and 2013, 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.

		March 31, 2014
				Unpaid				Average		Interest
		Recorded		Principal		Related		Recorded		Income
(Dollars in thousands)		Investment		Balance		Allowance		Investment		Recognized
Impaired loans with no related allowance recorded:
Commercial:
	General C&I	$	14,130	$	15,648	$	-	$	20,378	$	-
	TRUPs		0		0		-		3,250		-
	Income CRE		8,500		16,529		-		8,512		-
	Total	$	22,630	$	32,177	$	-	$	32,140	$	-
Retail:
	HELOC (a)	$	16,151	$	37,723	$	-	$	16,488	$	-
	R/E installment loans (a)		10,400		13,360		-		10,705		-
	Permanent mortgage (a)		7,854		11,078		-		8,157		-
	Total	$	34,405	$	62,161	$	-	$	35,350	$	-
Impaired loans with related allowance recorded:
Commercial:
	General C&I	$	27,723	$	33,911	$	1,201	$	22,232	$	79
	TRUPs		13,550		13,550		3,986		23,580		-
	Income CRE		11,821		13,540		783		12,097		102
	Residential CRE		6,380		11,675		712		6,647		63
	Total	$	59,474	$	72,676	$	6,682	$	64,556	$	244
Retail:
	HELOC	$	73,287	$	74,730	$	17,080	$	71,792	$	434
	R/E installment loans		73,738		74,645		26,573		73,015		269
	Permanent mortgage		113,989		127,958		19,211		113,493		723
	Credit card & other		772		772		236		658		11
	Total	$	261,786	$	278,105	$	63,100	$	258,958	$	1,437
Total commercial		$	82,104	$	104,853	$	6,682	$	96,696	$	244
Total retail		$	296,191	$	340,266	$	63,100	$	294,308	$	1,437
Total impaired loans		$	378,295	$	445,119	$	69,782	$	391,004	$	1,681


		March 31, 2013
				Unpaid				Average		Interest
		Recorded		Principal		Related		Recorded		Income
(Dollars in thousands)		Investment		Balance		Allowance		Investment		Recognized
Impaired loans with no related allowance recorded:
Commercial:
	General C&I	$	60,849	$	73,873	$	-	$	60,581	$	80
	TRUPs		10,000		10,000		-		17,000		-
	Income CRE		28,136		40,034		-		30,968		75
	Residential CRE		14,294		21,507		-		14,467		63
	Total	$	113,279	$	145,414	$	-	$	123,016	$	218
Retail:
	HELOC (a)	$	21,058	$	41,036	$	-	$	20,698	$	-
	R/E installment loans (a)		13,329		16,143		-		11,825		-
	Permanent mortgage (a)		10,771		14,634		-		9,991		-
	Total	$	45,158	$	71,813	$	-	$	42,514	$	-
Impaired loans with related allowance recorded:
Commercial:
	General C&I	$	3,754	$	3,754	$	1,159	$	7,027	$	-
	TRUPs		40,200		40,200		14,304		36,950		-
	Income CRE		1,071		1,071		156		1,075		11
	Total	$	45,025	$	45,025	$	15,619	$	45,052	$	11
Retail:
	HELOC	$	63,066	$	63,474	$	16,559	$	61,358	$	426
	R/E installment loans		68,474		69,136		24,219		69,082		285
	Permanent mortgage		109,283		121,993		22,239		116,487		683
	Credit card & other		747		747		231		782		8
	Total	$	241,570	$	255,350	$	63,248	$	247,709	$	1,402
Total commercial		$	158,304	$	190,439	$	15,619	$	168,068	$	229
Total retail		$	286,728	$	327,163	$	63,248	$	290,223	$	1,402
Total impaired loans		$	445,032	$	517,602	$	78,867	$	458,291	$	1,631
Certain previously reported amounts have been reclassified to agree with current presentation.

FHN employs a dual grade commercial risk grading methodology to assign an estimate for the probability of default ("PD") and the loss given default ("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. See Note 5 - Allowance for Loan Losses for further discussion on the credit grading system.

The following tables provide the balances of commercial loan portfolio classes with associated allowance, disaggregated by PD grade as of March 31, 2014 and 2013:
	March 31, 2014
			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	$	233,362	$	-	$	-	$	-	$	-	$	233,362		3	%	$	90
2		218,944		-		-		1,719		-		220,663		2			88
3		225,715		-		-		4,639		82		230,436		3			199
4		367,591		-		-		13,148		215		380,954		4			487
5		778,522		-		-		96,447		5,835		880,804		10			2,348
6		947,462		69,207		-		196,101		5,815		1,218,585		14			1,743
7		1,081,770		159,207		-		249,317		6,413		1,496,707		16			2,698
8		936,597		301,197		-		224,339		52		1,462,185		16			4,053
9		662,311		115,936		-		90,336		1,379		869,962		10			7,392
10		391,737		58,205		-		61,584		1,834		513,360		6			6,180
11		392,249		5,659		-		30,402		1,816		430,126		5			9,704
12		119,196		-		-		33,142		1,732		154,070		2			2,403
13		152,035		-		326,158		12,262		2,180		492,635		6			7,968
14,15,16		138,680		141		9,385		39,257		6,783		194,246		2			34,332
Collectively evaluated for impairment		6,646,171		709,552		335,543		1,052,693		34,136		8,778,095		99			79,685
Individually evaluated for impairment		41,853		-		13,115		20,321		6,380		81,669		1			6,682
Total commercial loans	$	6,688,024	$	709,552	$	348,658	$	1,073,014	$	40,516	$	8,859,764	(b)	100	%	$	86,367	(c)

	March 31, 2013
			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	$	169,342	$	-	$	-	$	-	$	-	$	169,342	2	%	$	51
2		172,481		-		-		2,513		-		174,994	2			82
3		164,654		-		-		6,241		-		170,895	2			101
4		309,242		-		-		6,188		216		315,646	3			421
5		672,509		-		-		34,672		275		707,456	8			1,284
6		939,686		121,538		-		148,174		7,308		1,216,706	13			3,206
7		1,012,012		329,484		-		177,656		1,877		1,521,029	17			3,397
8		1,015,430		411,119		-		237,433		257		1,664,239	18			5,314
9		641,720		227,410		-		123,351		765		993,246	11			8,851
10		461,381		40,177		-		106,948		1,053		609,559	7			7,805
11		440,142		-		-		54,810		1,801		496,753	5			9,837
12		168,677		-		-		22,233		188		191,098	2			2,808
13		114,717		-		337,725		36,729		10,585		499,756	5			8,371
14,15,16		227,018		351		3,335		76,433		14,672		321,809	3			34,096
Collectively evaluated for impairment		6,509,011		1,130,079		341,060		1,033,381		38,997		9,052,528	98			85,624
Individually evaluated for impairment		64,603		-		46,433		29,207		14,294		154,537	2			15,619
Total commercial loans	$	6,573,614	$	1,130,079	$	387,493	$	1,062,588	$	53,291	$	9,207,065	100	%	$	101,243

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 March 31, 2014 and 2013:

HELOC
	March 31, 2014						March 31, 2013
			Average		Average				Average		Average
(Dollars in thousands)	Period End		Origination		Refreshed		Period End		Origination		Refreshed
Origination Vintage	Balance		FICO		FICO		Balance		FICO		FICO
pre-2003	$	73,926		710		703	$	108,054		714		705
2003		130,144		723		709		208,233		732		723
2004		375,252		726		715		469,608		727		717
2005		517,957		732		721		592,322		734		719
2006		375,022		740		727		437,889		740		725
2007		396,409		743		728		460,916		745		728
2008		217,360		753		748		250,427		754		747
2009		113,703		751		746		134,294		752		745
2010		110,958		753		748		133,917		753		749
2011		110,815		758		754		129,303		759		756
2012		133,618		759		759		155,758		760		758
2013		169,429		760		757		27,853		756		754
2014		23,224		756		755		-		-		-
Total	$	2,747,817		741		731	$	3,108,574		740		729


R/E Installment Loans	March 31, 2014						March 31, 2013
			Average		Average				Average		Average
(Dollars in thousands)	Period End		Origination		Refreshed		Period End		Origination		Refreshed
Origination Vintage	Balance		FICO		FICO		Balance		FICO		FICO
pre-2003	$	21,069		681		687	$	33,454		685		682
2003		68,747		715		724		101,107		719		727
2004		51,187		701		699		66,809		703		701
2005		150,669		716		711		197,153		717		711
2006		165,515		715		700		209,755		718		703
2007		236,727		724		708		299,659		726		711
2008		80,067		722		718		104,651		725		716
2009		37,048		742		733		53,302		746		744
2010		120,128		748		754		146,048		746		750
2011		323,992		760		759		390,546		760		761
2012		675,368		764		765		741,406		764		762
2013		509,103		757		753		137,716		761		759
2014		70,577		756		750		-		-		-
Total	$	2,510,197		746		743	$	2,481,606		744		739


Permanent Mortgage	March 31, 2014						March 31, 2013
			Average		Average				Average		Average
(Dollars in thousands)	Period End		Origination		Refreshed		Period End		Origination		Refreshed
Origination Vintage	Balance		FICO		FICO		Balance		FICO		FICO
pre-2004	$	178,765		725		728	$	249,523		726		727
2004		21,398		712		691		28,662		714		691
2005		38,586		737		715		47,382		739		713
2006		72,413		728		706		89,179		732		712
2007		213,580		733		711		260,136		734		711
2008		97,500		741		712		118,400		742		712
Total	$	622,242		730		712	$	793,282		731		711

For all portfolio segments and classes other than PCI loans, 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. Current stand-alone second liens are placed on nonaccrual status if they are junior to first liens that are 90 days or more past due or the first lien has been modified into a TDR.

The following table reflects accruing and non-accruing loans by class on March 31, 2014:

	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	$	6,629,412	$	19,049	$	452	$	6,648,913	$	16,332	$	3,341	$	19,438	$	39,111	$	6,688,024
Loans to mortgage companies		709,339		72		-		709,411		-		-		141		141		709,552
TRUPs (a)		335,543		-		-		335,543		-		-		13,115		13,115		348,658
Purchased credit impaired loans		5,291		-		1,470		6,761		-		-		-		-		6,761
Total commercial (C&I)		7,679,585		19,121		1,922		7,700,628		16,332		3,341		32,694		52,367		7,752,995
Commercial real estate:
Income CRE		1,049,843		10,955		-		1,060,798		1,814		330		10,072		12,216		1,073,014
Residential CRE		37,516		282		-		37,798		-		-		2,718		2,718		40,516
Purchased credit impaired loans		31,515		5,830		1,543		38,888		-		-		-		-		38,888
Total commercial real estate		1,118,874		17,067		1,543		1,137,484		1,814		330		12,790		14,934		1,152,418
Consumer real estate:
HELOC		2,624,763		23,734		12,459		2,660,956		67,361		5,395		14,105		86,861		2,747,817
R/E installment loans		2,447,448		10,812		6,074		2,464,334		35,069		3,486		6,605		45,160		2,509,494
Purchased credit impaired loans		703		-		-		703		-		-		-		-		703
Total consumer real estate		5,072,914		34,546		18,533		5,125,993		102,430		8,881		20,710		132,021		5,258,014
Permanent mortgage		573,095		6,101		2,845		582,041		15,924		2,048		22,229		40,201		622,242
Credit card & other
Credit card		180,011		1,810		1,622		183,443		-		-		-		-		183,443
Other		148,062		761		130		148,953		1,396		-		-		1,396		150,349
Total credit card & other		328,073		2,571		1,752		332,396		1,396		-		-		1,396		333,792
Total loans, net of unearned	$	14,772,541	$	79,406	$	26,595	$	14,878,542	$	137,896	$	14,600	$	88,423	$	240,919	$	15,119,461

The following table reflects accruing and non-accruing loans by class on March 31, 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	$	6,493,628	$	13,177	$	428	$	6,507,233	$	22,439	$	9,694	$	34,248	$	66,381	$	6,573,614
Loans to mortgage companies		1,129,728		-		-		1,129,728		-		-		351		351		1,130,079
TRUPs (a)		341,060		-		-		341,060		-		-		46,433		46,433		387,493
Total commercial (C&I)		7,964,416		13,177		428		7,978,021		22,439		9,694		81,032		113,165		8,091,186
Commercial real estate:
Income CRE		1,031,037		4,679		-		1,035,716		5,643		1,705		19,524		26,872		1,062,588
Residential CRE		41,576		-		-		41,576		1,383		-		10,332		11,715		53,291
Total commercial real estate		1,072,613		4,679		-		1,077,292		7,026		1,705		29,856		38,587		1,115,879
Consumer real estate:
HELOC		3,022,483		28,914		18,135		3,069,532		28,072		1,390		9,580		39,042		3,108,574
R/E installment loans		2,432,315		11,977		8,456		2,452,748		19,692		2,685		6,481		28,858		2,481,606
Total consumer real estate		5,454,798		40,891		26,591		5,522,280		47,764		4,075		16,061		67,900		5,590,180
Permanent mortgage		741,500		6,025		11,126		758,651		12,866		1,266		20,499		34,631		793,282
Credit card & other
Credit card		178,310		1,430		1,483		181,223		-		-		-		-		181,223
Other		115,390		723		90		116,203		1,717		-		-		1,717		117,920
Total credit card & other		293,700		2,153		1,573		297,426		1,717		-		-		1,717		299,143
Total loans, net of unearned	$	15,527,027	$	66,925	$	39,718	$	15,633,670	$	91,812	$	16,740	$	147,448	$	256,000	$	15,889,670

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, among other things, 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, 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.

In 2012, the OCC clarified that the discharge of personal liability through bankruptcy proceedings should be considered a concession. As a result, FHN classifies all non-reaffirmed residential real estate loans after bankruptcy as nonaccruing TDRs.

On March 31, 2014 and 2013, FHN had $353.4 million and $352.4 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $65.8 million and $64.6 million, or 19 percent as of March 31, 2014, and 18 percent as of March 31, 2013. Additionally, $137.0 million and $128.6 million of loans held-for-sale as of March 31, 2014 and 2013, respectively were classified as TDRs.

The following table reflects portfolio loans that were classified as TDRs during the three months ended March 31, 2014 and 2013:

		2014					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		-	$	-	$	-	5	$	1,242	$	1,238
	Total commercial (C&I)	-		-		-	5		1,242		1,238
Commercial real estate:
Income CRE		-		-		-	-		-		-
Residential CRE		-		-		-	-		-		-
	Total commercial real estate	-		-		-	-		-		-
Consumer real estate:
HELOC		67		5,790		5,768	115		7,759		7,551
R/E installment loans		72		5,143		5,102	179		6,285		6,233
	Total consumer real estate	139		10,933		10,870	294		14,044		13,784
Permanent mortgage		12		4,593		4,087	12		4,737		4,852
Credit card & other		20		87		85	11		62		59
Total troubled debt restructurings		171	$	15,613	$	15,042	322	$	20,085	$	19,933

The following table presents TDRs which re-defaulted during the three months ended March 31, 2014 and 2013, 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 defaulted 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 30 or more plus days past due.

		2014			2013
			Recorded			Recorded
(Dollars in thousands)		Number	Investment		Number	Investment
Commercial (C&I):
General C&I		4	$	512	7	$	6,052
	Total commercial (C&I)	4		512	7		6,052
Commercial real estate:
Income CRE		2		389	3		1,397
Residential CRE		-		-	1		33
	Total commercial real estate	2		389	4		1,430
Consumer real estate:
HELOC		4		307	7		344
R/E installment loans		3		118	4		129
	Total consumer real estate	7		425	11		473
Permanent mortgage		-		-	9		4,398
Credit card & other		2		4	2		5
Total troubled debt restructurings		15	$	1,330	33	$	12,358

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.