Business Segment Information

6 Months Ended

Jun. 30, 2017

Segment Reporting, Measurement Disclosures [Abstract]

Business Segment Information

Business Segment Information

FHN has four business segments: regional banking, fixed income, corporate, and non-strategic. The regional banking segment offers financial products and services, including traditional lending and deposit taking, to consumer and commercial customers in Tennessee and other selected markets. Regional banking also provides investments, financial planning, trust services and asset management, credit card, and cash management. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking related services to other financial institutions nationally. The fixed income segment consists of fixed income securities sales, trading, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory services, and derivative sales. The corporate segment consists of 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, tax credit investment activities, derivative valuation adjustments related to prior sales of Visa Class B shares, and acquisition-related costs. 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.

Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses and equity among segments which could change historical segment results. Business segment revenue, expense, asset, and equity 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, to an extent they are subjective. Generally, all assignments and allocations have been consistently applied for all periods presented. The following table reflects the amounts of consolidated revenue, expense, tax, and average assets for each segment for the three and six months ended June 30:

	Three Months Ended June 30					Six Months Ended June 30
(Dollars in thousands)	2017			2016		2017			2016
Consolidated
Net interest income	$	200,701		$	176,264	$	390,409		$	348,338
Provision/(provision credit) for loan losses	(2,000		)	4,000		(3,000		)	7,000
Noninterest income	127,673			145,514		244,612			279,819
Noninterest expense	217,917			226,822		440,122			453,749
Income/(loss) before income taxes	112,457			90,956		197,899			167,408
Provision/(benefit) for income taxes (a)	17,253			30,016		44,307			54,255
Net income/(loss)	$	95,204		$	60,940	$	153,592		$	113,153
Average assets	$	28,876,350		$	26,828,548	$	28,841,422		$	26,723,621

	Three Months Ended June 30						Six Months Ended June 30
(Dollars in thousands)	2017			2016			2017			2016
Regional Banking
Net interest income	$	201,997		$	178,318		$	395,386		$	350,627
Provision/(provision credit) for loan losses	260			10,883			3,358			25,651
Noninterest income	64,737			61,275			123,713			120,551
Noninterest expense	152,659			164,524			300,723			309,920
Income/(loss) before income taxes	113,815			64,186			215,018			135,607
Provision/(benefit) for income taxes	41,136			22,333			77,724			47,709
Net income/(loss)	$	72,679		$	41,853		$	137,294		$	87,898
Average assets	$	18,431,757		$	16,575,643		$	18,194,854		$	16,260,417
Fixed Income
Net interest income	$	4,979		$	3,146		$	6,130		$	5,813
Noninterest income	55,205			78,083			106,027			145,205
Noninterest expense	54,001			62,802			102,686			121,427
Income/(loss) before income taxes	6,183			18,427			9,471			29,591
Provision/(benefit) for income taxes	1,946			6,785			2,970			10,677
Net income/(loss)	$	4,237		$	11,642		$	6,501		$	18,914
Average assets	$	2,696,430		$	2,470,724		$	2,288,336		$	2,370,201
Corporate
Net interest income/(expense)	$	(14,995	)	$	(15,847	)	$	(29,095	)	$	(30,208	)
Noninterest income	6,218			4,909			11,694			10,632
Noninterest expense	24,563			15,930			41,443			29,391
Income/(loss) before income taxes	(33,340		)	(26,868		)	(58,844		)	(48,967		)
Provision/(benefit) for income taxes (a)	(35,711		)	(12,744		)	(48,769		)	(23,959		)
Net income/(loss)	$	2,371		$	(14,124	)	$	(10,075	)	$	(25,008	)
Average assets	$	6,226,743		$	5,833,303		$	6,789,751		$	6,097,764
Non-Strategic
Net interest income	$	8,720		$	10,647		$	17,988		$	22,106
Provision/(provision credit) for loan losses	(2,260		)	(6,883		)	(6,358		)	(18,651		)
Noninterest income	1,513			1,247			3,178			3,431
Noninterest expense	(13,306		)	(16,434		)	(4,730		)	(6,989		)
Income/(loss) before income taxes	25,799			35,211			32,254			51,177
Provision/(benefit) for income taxes	9,882			13,642			12,382			19,828
Net income/(loss)	$	15,917		$	21,569		$	19,872		$	31,349
Average assets	$	1,521,420		$	1,948,878		$	1,568,481		$	1,995,239

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

(a) Provision/(benefit) for income taxes for consolidated results and the Corporate segment for the three and six months ended June 30, 2017, relative to the prior year periods, was affected by a decline in the effective tax rate in 2017 primarily related to the reversal of the valuation allowance for the deferred tax asset related to its 2012 federal capital loss carryforward based on capital gain transactions initiated in second quarter 2017. See Note 15 – Income Taxes in the Notes to Consolidated Financial Statements on FHN’s Form 10-K for the year ended December 31, 2016, for additional information.