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Business Segment Information
 3 Months Ended
Mar. 31, 2020
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 the southeast U.S. 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, 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 months ended March 31:
 
 
Three Months Ended
March 31
(Dollars in thousands)
 
2020
 
2019
Consolidated
 
 
 
 
Net interest income
 
$
302,802

 
$
294,508

Provision/(provision credit) for loan losses (a)
 
145,000

 
9,000

Noninterest income
 
174,756

 
141,045

Noninterest expense
 
311,319

 
296,090

Income/(loss) before income taxes
 
21,239

 
130,463

Provision/(benefit) for income taxes
 
4,767

 
27,058

Net income/(loss)
 
$
16,472

 
$
103,405

Average assets
 
$
43,551,912

 
$
40,883,192

(a)
First quarter 2020 increase in provision expense primarily associated with a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.

















 
 
Three Months Ended
March 31
(Dollars in thousands)
 
2020
 
2019
Regional Banking
 
 
 
 
Net interest income
 
$
300,128

 
$
286,023

Provision/(provision credit) for loan losses (a)
 
145,435

 
13,442

Noninterest income
 
81,871

 
73,029

Noninterest expense
 
211,013

 
198,569

Income/(loss) before income taxes
 
25,551

 
147,041

Provision/(benefit) for income taxes
 
4,388

 
34,109

Net income/(loss)
 
$
21,163

 
$
112,932

Average assets
 
$
32,164,347

 
$
28,801,849

Fixed Income
 
 
 
 
Net interest income
 
$
10,914

 
$
7,332

Noninterest income
 
95,723

 
53,807

Noninterest expense
 
81,063

 
50,533

Income/(loss) before income taxes
 
25,574

 
10,606

Provision/(benefit) for income taxes
 
6,099

 
2,457

Net income/(loss)
 
$
19,475

 
$
8,149

Average assets
 
$
3,764,192

 
$
2,848,249

Corporate
 
 
 
 
Net interest income/(expense)
 
$
(13,359
)
 
$
(7,914
)
Noninterest income (b)
 
(3,718
)
 
13,353

Noninterest expense (b) (c)
 
15,449

 
41,779

Income/(loss) before income taxes
 
(32,526
)
 
(36,340
)
Provision/(benefit) for income taxes
 
(6,372
)
 
(11,771
)
Net income/(loss)
 
$
(26,154
)
 
$
(24,569
)
Average assets
 
$
6,784,190

 
$
8,058,041

Non-Strategic
 
 
 
 
Net interest income
 
$
5,119

 
$
9,067

Provision/(provision credit) for loan losses (a)
 
(435
)
 
(4,442
)
Noninterest income
 
880

 
856

Noninterest expense
 
3,794

 
5,209

Income/(loss) before income taxes
 
2,640

 
9,156

Provision/(benefit) for income taxes
 
652

 
2,263

Net income/(loss)
 
$
1,988

 
$
6,893

Average assets
 
$
839,183

 
$
1,175,053

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
First quarter 2020 increase in provision expense primarily associated with a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.
(b)
First quarter 2020 decrease due to fluctuations in deferred compensation income driven by equity market valuations and mirrored by changes in deferred compensation expense, which is included in employee compensation expense.
(c)
2020 and 2019 include restructuring-related costs associated with efficiency initiatives; refer to Note 17 - Restructuring, Repositioning, and Efficiency for additional information. 2020 and 2019 include acquisition-related expenses; refer to Note 2 - Acquisitions and Divestitures for additional information.









The following tables reflect a disaggregation of FHN’s noninterest income by major product line and reportable segment for the three months ended March 31, 2020 and 2019:
 
Three months ended March 31, 2020
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non-Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
121

 
$
95,514

 
$
—

 
$
—

 
$
95,635

Deposit transactions and cash management
28,812

 
—

 
1,435

 
43

 
30,290

Brokerage, management fees and commissions
15,405

 
—

 
—

 
—

 
15,405

Bankcard income
7,150

 
—

 
70

 
33

 
7,253

Trust services and investment management
7,213

 
—

 
(18
)
 
—

 
7,195

BOLI (b)
—

 
—

 
4,589

 
—

 
4,589

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

 
—

 
25

 
—

 
25

All other income and commissions (c) (d)
23,170

 
209

 
(9,819
)
 
804

 
14,364

     Total noninterest income
$
81,871

 
$
95,723

 
$
(3,718
)
 
$
880

 
$
174,756

(a)
Includes $9.3 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.
(d)
First quarter 2020 Corporate balance includes negative deferred compensation income driven by equity market valuations.

 
Three months ended March 31, 2019
(Dollars in thousands)
Regional Banking
 
Fixed Income
 
Corporate
 
Non- Strategic
 
Consolidated
Noninterest income:
 
 
 
 
 
 
 
 
 
Fixed income (a)
$
17

 
$
53,732

 
$
—

 
$
—

 
$
53,749

Deposit transactions and cash management
30,003

 
3

 
1,563

 
52

 
31,621

Brokerage, management fees and commissions
12,630

 
—

 
—

 
3

 
12,633

Bankcard income
7,039

 
—

 
62

 
(149
)
 
6,952

Trust services and investment management
7,056

 
—

 
(30
)
 
—

 
7,026

BOLI (b)
—

 
—

 
4,402

 
—

 
4,402

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

 
—

 
31

 
—

 
31

All other income and commissions (c)
16,284

 
72

 
7,325

 
950

 
24,631

     Total noninterest income
$
73,029

 
$
53,807

 
$
13,353

 
$
856

 
$
141,045

Certain previously reported amounts have been reclassified to agree with current presentation.
(a)
Includes $7.3 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.