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Business Segment Information
 9 Months Ended
Sep. 30, 2019
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, North Carolina, South Carolina, Florida and other selected markets. Regional banking also provides investments, wealth management, financial planning, trust services and asset management, mortgage banking, 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, underwriting, 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, gain/(loss) on extinguishment of debt, acquisition- and integration-related costs, expenses associated with rebranding initiatives, and various charges related to restructuring, repositioning, and efficiency efforts. The non-strategic segment consists of run-off consumer lending activities, legacy (pre-2009) mortgage banking elements, 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 nine months ended September 30:
 
 
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(Dollars in thousands)
 
2019
 
2018
 
2019
 
2018
Consolidated
 
 
 
 
 
 
 
 
Net interest income
 
$
300,676

 
$
305,700

 
$
898,794

 
$
917,805

Provision/(provision credit) for loan losses
 
15,000

 
2,000

 
37,000

 
1,000

Noninterest income
 
171,735

 
348,972

 
470,773

 
612,514

Noninterest expense
 
307,672

 
294,031

 
904,156

 
940,064

Income/(loss) before income taxes
 
149,739

 
358,641

 
428,411

 
589,255

Provision/(benefit) for income taxes
 
35,796

 
83,925

 
97,321

 
133,553

Net income/(loss)
 
$
113,943

 
$
274,716

 
$
331,090

 
$
455,702

Average assets
 
$
41,940,901

 
$
40,077,033

 
$
41,359,574

 
$
40,199,487


 
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(Dollars in thousands)
 
2019
 
2018
 
2019
 
2018
Regional Banking
 
 
 
 
 
 
 
 
Net interest income
 
$
302,370

 
$
301,099

 
$
885,622

 
$
899,183

Provision/(provision credit) for loan losses
 
20,472

 
7,205

 
51,690

 
16,155

Noninterest income
 
85,776

 
80,705

 
240,281

 
241,760

Noninterest expense
 
193,211

 
207,549

 
585,947

 
620,261

Income/(loss) before income taxes
 
174,463

 
167,050

 
488,266

 
504,527

Provision/(benefit) for income taxes
 
41,762

 
39,195

 
115,129

 
118,582

Net income/(loss)
 
$
132,701

 
$
127,855

 
$
373,137

 
$
385,945

Average assets
 
$
31,626,870

 
$
28,551,247

 
$
30,224,875

 
$
28,339,571

Fixed Income
 
 
 
 
 
 
 
 
Net interest income
 
$
5,309

 
$
9,054

 
$
18,811

 
$
26,742

Noninterest income
 
77,809

 
41,124

 
197,238

 
125,091

Noninterest expense
 
67,787

 
46,561

 
174,331

 
142,857

Income/(loss) before income taxes
 
15,331

 
3,617

 
41,718

 
8,976

Provision/(benefit) for income taxes
 
3,656

 
719

 
9,834

 
1,689

Net income/(loss)
 
$
11,675

 
$
2,898

 
$
31,884

 
$
7,287

Average assets
 
$
2,882,316

 
$
3,246,120

 
$
2,952,766

 
$
3,322,576

Corporate
 
 
 
 
 
 
 
 
Net interest income/(expense)
 
$
(13,225
)
 
$
(15,462
)
 
$
(28,062
)
 
$
(48,835
)
Noninterest income (a)
 
7,359

 
222,620

 
30,111

 
240,674

Noninterest expense (b) (c)
 
41,993

 
33,561

 
137,867

 
154,779

Income/(loss) before income taxes
 
(47,859
)
 
173,597

 
(135,818
)
 
37,060

Provision/(benefit) for income taxes
 
(11,550
)
 
40,458

 
(36,105
)
 
3,719

Net income/(loss)
 
$
(36,309
)
 
$
133,139

 
$
(99,713
)
 
$
33,341

Average assets
 
$
6,430,822

 
$
6,907,970

 
$
7,094,650

 
$
6,995,043

Non-Strategic
 
 
 
 
 
 
 
 
Net interest income
 
$
6,222

 
$
11,009

 
$
22,423

 
$
40,715

Provision/(provision credit) for loan losses
 
(5,472
)
 
(5,205
)
 
(14,690
)
 
(15,155
)
Noninterest income
 
791

 
4,523

 
3,143

 
4,989

Noninterest expense
 
4,681

 
6,360

 
6,011

 
22,167

Income/(loss) before income taxes
 
7,804

 
14,377

 
34,245

 
38,692

Provision/(benefit) for income taxes
 
1,928

 
3,553

 
8,463

 
9,563

Net income/(loss)
 
$
5,876

 
$
10,824

 
$
25,782

 
$
29,129

Average assets
 
$
1,000,893

 
$
1,371,696

 
$
1,087,283

 
$
1,542,297

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Three and nine months ended September 30, 2018 includes a $212.9 million pre-tax gain from the sale of Visa Class B shares.
(b)
Three and nine months ended September 30, 2019 include restructuring-related costs associated with efficiency initiatives; refer to Note 18 - Restructuring, Repositioning, and Efficiency for additional information. Three and nine months ended September 30, 2019 and 2018 include acquisition-related expenses; refer to Note 2 - Acquisitions and Divestitures for additional information.
(c)
Three and nine months ended September 30, 2019 include $3.1 million and $12.2 million, respectively, of asset impairments, professional fees, and other customer-contact and technology-related expenses associated with rebranding initiatives.









The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three months ended September 30, 2019 and 2018:
 
Three months ended September 30, 2019
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non-Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
57

 
$
77,588

 
$
—

 
$
—

 
$
77,645

Deposit transactions and cash management
32,583

 
—

 
1,739

 
57

 
34,379

Brokerage, management fees and commissions
14,157

 
—

 
—

 
—

 
14,157

Trust services and investment management
7,190

 
—

 
(27
)
 
—

 
7,163

Bankcard income
7,028

 
11

 
63

 
(85
)
 
7,017

BOLI (b)
—

 
—

 
4,427

 
—

 
4,427

Debt securities gains/(losses), net (b)
—

 
—

 
—

 
—

 
—

Equity securities gains/(losses), net (b)
—

 
—

 
97

 
—

 
97

All other income and commissions (c)
24,761

 
210

 
1,060

 
819

 
26,850

     Total noninterest income
$
85,776

 
$
77,809

 
$
7,359

 
$
791

 
$
171,735

(a)
Includes $9.2 million of underwriting, portfolio advisory, and other noninterest income in scope of Accounting Standards Codification ("ASC") 606, "Revenue From Contracts With Customers."
(b)
Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total non-interest income.
(c)
Includes other service charges, ATM and interchange fees, electronic banking fees, and insurance commission in scope of ASC 606.

 
Three months ended September 30, 2018
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non- Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
102

 
$
40,938

 
$
(5
)
 
$
3,778

 
$
44,813

Deposit transactions and cash management
33,989

 
3

 
1,741

 
59

 
35,792

Brokerage, management fees and commissions
14,199

 
—

 
—

 
1

 
14,200

Trust services and investment management
7,453

 
—

 
(15
)
 
—

 
7,438

Bankcard income
7,865

 
—

 
57

 
(178
)
 
7,744

BOLI (b)
—

 
—

 
4,337

 
—

 
4,337

Debt securities gains/(losses), net (b)
—

 
—

 
—

 
—

 
—

Equity securities gains/(losses), net (b) (d)
—

 
—

 
212,859

 
—

 
212,859

All other income and commissions (c)
17,097

 
183

 
3,646

 
863

 
21,789

     Total noninterest income
$
80,705

 
$
41,124

 
$
222,620

 
$
4,523

 
$
348,972

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Includes $8.4 million of underwriting, portfolio advisory, and other noninterest income in scope of Accounting Standards
Codification ("ASC") 606, "Revenue From Contracts With Customers." Non-Strategic includes a $3.8 million gain from the
reversal of a previous valuation adjustment due to sales of TRUPs loans excluded from the scope of ASC 606.
(b)
Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile
total non-interest income.
(c)
Includes other service charges, ATM and interchange fees, electronic banking fees, and insurance commission in scope of ASC
606.
(d)
In third quarter 2018, FHN sold its remaining holdings of Visa Class B shares resulting in a pre-tax gain of $212.9 million.




 
Nine months ended September 30, 2019
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non-Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
120

 
$
196,582

 
$
—

 
$
1,106

 
$
197,808

Deposit transactions and cash management
93,195

 
4

 
5,009

 
166

 
98,374

Brokerage, management fees and commissions
40,904

 
—

 
—

 
6

 
40,910

Trust services and investment management
22,148

 
—

 
(71
)
 
—

 
22,077

Bankcard income
20,661

 
11

 
185

 
(533
)
 
20,324

BOLI (b)
—

 
—

 
13,955

 
—

 
13,955

Debt securities gains/(losses), net (b)
—

 
—

 
(267
)
 
—

 
(267
)
Equity securities gains/(losses), net (b)
—

 
—

 
444

 
—

 
444

All other income and commissions (c)
63,253

 
641

 
10,856

 
2,398

 
77,148

     Total noninterest income
$
240,281

 
$
197,238

 
$
30,111

 
$
3,143

 
$
470,773

(a)
Includes $23.6 million of underwriting, portfolio advisory, and other noninterest income in scope of Accounting Standards Codification ("ASC") 606, "Revenue From Contracts With Customers."
(b)
Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile total non-interest income.
(c)
Includes other service charges, ATM and interchange fees, electronic banking fees, and insurance commission in scope of ASC 606.

 
Nine months ended September 30, 2018
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non- Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
314

 
$
123,929

 
$
(5
)
 
$
3,778

 
$
128,016

Deposit transactions and cash management
103,219

 
9

 
4,467

 
164

 
107,859

Brokerage, management fees and commissions
41,422

 
—

 
—

 
1

 
41,423

Trust services and investment management
22,891

 
—

 
(44
)
 
—

 
22,847

Bankcard income
21,696

 
—

 
169

 
(131
)
 
21,734

BOLI (b)
—

 
—

 
14,103

 
—

 
14,103

Debt securities gains/(losses), net (b)
—

 
—

 
52

 
—

 
52

Equity securities gains/(losses), net (b) (d)
—

 
—

 
212,924

 
—

 
212,924

All other income and commissions (c) (e)
52,218

 
1,153

 
9,008

 
1,177

 
63,556

     Total noninterest income
$
241,760

 
$
125,091

 
$
240,674

 
$
4,989

 
$
612,514

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Includes $24.0 million of underwriting, portfolio advisory, and other noninterest income in scope of Accounting Standards
Codification ("ASC") 606, "Revenue From Contracts With Customers." Non-Strategic includes a $3.8 million gain from the
reversal of a previous valuation adjustment due to sales of TRUPs loans excluded from the scope of ASC 606.
(b)
Represents noninterest income excluded from the scope of ASC 606. Amount is presented for informational purposes to reconcile
total non-interest income.
(c)
Includes other service charges, ATM and interchange fees, electronic banking fees, and insurance commission in scope of ASC 606.
(d)
In third quarter 2018, FHN sold its remaining holdings of Visa Class B shares resulting in a pre-tax gain of $212.9 million.
(e)
Corporate includes $4.1 million of gains on the sales of buildings.