Business Segment Information

9 Months Ended

Sep. 30, 2012

Business Segment Information [Abstract]

Business Segment Information

Note 11 – Business Segment Information

FHN has four business segments: regional banking, capital markets, corporate, and non-strategic. The regional banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers in Tennessee and surrounding markets. Regional banking provides investments, financial planning, trust services and asset management, credit card, cash management, and first lien mortgage originations within the Tennessee footprint. Additionally, the regional banking segment includes correspondent banking which provides credit, depository, and other banking related services to other financial institutions. The capital markets segment consists of fixed income sales, trading, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory, and derivative sales. The corporate segment consists of gains on the extinguishment of debt, 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, and various charges related to restructuring, repositioning, and efficiency. 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 along with the associated restructuring, repositioning, and efficiency charges.

In 2011, FHN sold FHI, Highland, and Msaver. The results of operations for these divested businesses have been included in the Income/(loss) from discontinued operations, net of tax line on the Consolidated Condensed Statements of Income for all periods presented.

Periodically, FHN adapts its segments to reflect managerial or strategic changes. FHN may also modify its methodology of allocating expenses among segments which could change historical segment results. Total revenue, expense, and asset levels reflect those which are specifically identifiable or which are allocated based on internal allocation method. Because the allocations are based on internally developed assignments and allocations they are to an extent 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 assets for each segment for the three and nine months ended September 30:

	Three Months Ended				Nine Months Ended
	September 30				September 30
(Dollars in thousands)	2012		2011		2012		2011
Consolidated
Net interest income	$	173,465	$	176,340	$	518,069	$	521,955
Provision for loan losses		40,000		32,000		63,000		34,000
Noninterest income		163,538		220,887		524,886		604,816
Noninterest expense		263,169		322,708		1,112,340		980,960
Income/(loss) before income taxes		33,834		42,519		(132,385)		111,811
Provision/(benefit) for income taxes		5,260		8,367		(72,348)		16,362
Income/(loss) from continuing operations		28,574		34,152		(60,037)		95,449
Income/(loss) from discontinued operations, net of tax		108		4,828		160		9,369
Net income/(loss)	$	28,682	$	38,980	$	(59,877)	$	104,818
Average assets	$	25,089,754	$	24,778,116	$	25,101,544	$	24,622,862

	Three Months Ended				Nine Months Ended
	September 30				September 30
(Dollars in thousands)	2012		2011		2012		2011
Regional Banking
Net interest income	$	150,352	$	140,658	$	444,859	$	411,703
Provision/(provision credit) for loan losses		4,286		(22,698)		1,688		(48,850)
Noninterest income		63,954		68,096		188,693		202,270
Noninterest expense		141,157		137,208		424,047		428,468
Income/(loss) before income taxes		68,863		94,244		207,817		234,355
Provision/(benefit) for income taxes		24,959		34,851		75,382		86,197
Net income/(loss)	$	43,904	$	59,393	$	132,435	$	148,158
Average assets	$	12,933,782	$	11,478,534	$	12,507,910	$	11,224,698

Capital Markets
Net interest income	$	4,759	$	5,552	$	16,056	$	16,564
Noninterest income		80,808		99,505		262,547		267,510
Noninterest expense		64,590		77,168		205,772		254,114
Income/(loss) before income taxes		20,977		27,889		72,831		29,960
Provision/(benefit) for income taxes		7,899		10,656		27,564		11,306
Net income/(loss)	$	13,078	$	17,233	$	45,267	$	18,654
Average assets	$	2,230,975	$	2,343,879	$	2,321,695	$	2,222,525

Corporate
Net interest income/(expense)	$	(5,294)	$	(1,080)	$	(15,360)	$	(2,101)
Noninterest income		7,933		37,914		21,037		59,472
Noninterest expense		22,013		19,099		64,667		75,945
Income/(loss) before income taxes		(19,374)		17,735		(58,990)		(18,574)
Provision/(benefit) for income taxes		(13,496)		340		(38,988)		(29,578)
Net income/(loss)	$	(5,878)	$	17,395	$	(20,002)	$	11,004
Average assets	$	5,151,567	$	5,123,252	$	5,291,435	$	5,107,231

Non-Strategic
Net interest income	$	23,648	$	31,210	$	72,514	$	95,789
Provision for loan losses		35,714		54,698		61,312		82,850
Noninterest income		10,843		15,372		52,609		75,564
Noninterest expense		35,409		89,233		417,854		222,433
Income/(loss) before income taxes		(36,632)		(97,349)		(354,043)		(133,930)
Provision/(benefit) for income taxes		(14,102)		(37,480)		(136,306)		(51,563)
Income/(loss) from continuing operations		(22,530)		(59,869)		(217,737)		(82,367)
Income/(loss) from discontinued operations, net of tax		108		4,828		160		9,369
Net income/(loss)	$	(22,422)	$	(55,041)	$	(217,577)	$	(72,998)
Average assets	$	4,773,430	$	5,832,451	$	4,980,504	$	6,068,408

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