Loans

3 Months Ended

Mar. 31, 2015

Note 4 – Loans

The following table provides the balance of loans by portfolio segment as of March 31, 2015 and 2014, and December 31, 2014:

		March 31				December 31
(Dollars in thousands)		2015		2014		2014
Commercial:
	Commercial, financial, and industrial	$	9,638,355	$	7,752,995	$	9,007,286
	Commercial real estate		1,320,897		1,152,418		1,277,717
Retail:
	Consumer real estate (a)		4,922,817		5,258,014		5,048,071
	Permanent mortgage		511,708		622,242		538,961
	Credit card & other		338,346		333,792		358,131
Loans, net of unearned income		$	16,732,123	$	15,119,461	$	16,230,166
Allowance for loan losses			228,328		247,246		232,448
Total net loans		$	16,503,795	$	14,872,215	$	15,997,718

(a) Balances as of March 31, 2015 and 2014, and December 31, 2014 include $71.6 million, $86.7 million, and $76.8 million of restricted real estate loans, respectively. See Note 13 - Variable Interest Entities for additional information.

COMPONENTS OF THE LOAN PORTFOLIO

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 PCI loans. Loans to mortgage companies includes commercial lines of credit to qualified mortgage companies primarily 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 CRE 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.

Concentrations

FHN has a concentration of residential real estate loans (32 percent of total loans), the majority of which is in the consumer real estate segment (29 percent of total loans). Loans to finance and insurance companies total $2.0 billion (21 percent of the C&I portfolio, or 12 percent of the total loans). FHN had loans to mortgage companies totaling $1.6 billion (17 percent of the C&I segment, or 10 percent of total loans) as of March 31, 2015. As a result, 38 percent of the C&I segment was sensitive to impacts on the financial services industry.

Purchased Credit Impaired Loans

The following table presents a rollforward of the accretable yield for the three months ended March 31, 2015 and 2014:

		Three Months Ended
		March 31
(Dollars in thousands)		2015		2014
Balance, beginning of period	$	14,714	$	13,490
Additions		-		111
Accretion		(3,371)		(1,657)
Adjustment for payoffs		(1,336)		(233)
Adjustment for charge-offs		-		(64)
Increase in accretable yield (a)		461		4,181
Balance, end of period	$	10,468	$	15,828

Includes changes in the accretable yield due to both transfers from the nonaccretable difference and the impact of changes in the expected timing of the cash flows.

At March 31, 2015, the ALLL related to PCI loans was $3.1 million compared to $1.9 million at March 31, 2014. A loan loss provision credit of $.2 million was recognized during the three months ended March 31, 2015 as compared to a loan loss provision expense of $1.2 million recognized during the three months ended March 31, 2014. The following table reflects the outstanding principal balance and carrying amounts of the acquired PCI loans as of March 31, 2015 and 2014, and December 31, 2014:

	March 31, 2015				March 31, 2014				December 31, 2014
(Dollars in thousands)	Carrying value		Unpaid balance		Carrying value		Unpaid balance		Carrying value		Unpaid balance
Commercial, financial and industrial	$	4,665	$	5,437	$	6,693	$	8,503	$	5,044	$	5,813
Commercial real estate		23,013		29,205		37,067		52,690		32,553		43,246
Consumer real estate		1,910		2,897		693		973		598		868
Credit card and other		9		12		-		-		10		14
Total	$	29,597	$	37,551	$	44,453	$	62,166	$	38,205	$	49,941

Impaired Loans

The following tables provide information at March 31, 2015 and 2014, 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, 2015
		March 31, 2015
				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	$	13,630	$	16,803	$	-	$	11,594	$	-
	Income CRE		4,209		11,366		-		6,369		-
	Residential CRE		-		-		-		574		-
	Total	$	17,839	$	28,169	$	-	$	18,537	$	-
Retail:
	HELOC (a)	$	12,600	$	31,419	$	-	$	12,989	$	-
	R/E installment loans (a)		4,518		5,827		-		4,669		3
	Permanent mortgage (a)		7,205		9,336		-		7,231		-
	Total	$	24,323	$	46,582	$	-	$	24,889	$	3
Impaired loans with related allowance recorded:
Commercial:
	General C&I	$	26,252	$	30,759	$	1,709	$	19,772	$	253
	TRUPS		13,429		13,700		4,310		13,444		-
	Income CRE		6,695		8,180		502		7,540		30
	Residential CRE		1,624		1,991		109		1,497		7
	Total	$	48,000	$	54,630	$	6,630	$	42,253	$	290
Retail:
	HELOC	$	85,102	$	87,242	$	20,513	$	84,636	$	448
	R/E installment loans		69,391		70,384		21,224		70,124		327
	Permanent mortgage		103,633		116,482		17,766		104,917		591
	Credit card & other		484		484		228		508		4
	Total	$	258,610	$	274,592	$	59,731	$	260,185	$	1,370
Total commercial		$	65,839	$	82,799	$	6,630	$	60,790	$	290
Total retail		$	282,933	$	321,174	$	59,731	$	285,074	$	1,373
Total impaired loans		$	348,772	$	403,973	$	66,361	$	345,864	$	1,663

All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance.

		March 31, 2014
		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		-		-		-			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

All discharged bankruptcy loans are charged down to an estimate of net realizable value and do not carry any allowance.

Asset Quality Indicators

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, 2015 and 2014.
	March 31, 2015
			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	$	446,725	$	-	$	-	$	605	$	59	$	447,389	4	%	$	75
2		550,069		-		-		1,896		233		552,198	5			173
3		528,347		276,653		-		63,112		261		868,373	8			228
4		663,213		235,434		-		64,020		229		962,896	9			435
5		1,050,800		384,418		-		253,658		1,840		1,690,716	15			2,743
6		1,111,069		498,752		-		213,787		5,333		1,828,941	17			5,488
7		1,278,125		192,154		-		231,551		14,316		1,716,146	16			9,169
8		735,695		27,813		-		173,744		518		937,770	9			9,786
9		474,912		26,448		-		131,893		922		634,175	6			8,642
10		228,176		-		-		26,641		165		254,982	2			4,811
11		209,639		-		-		27,255		946		237,840	2			5,783
12		93,055		-		-		29,205		493		122,753	1			4,103
13		114,775		-		325,382		4,530		1,076		445,763	4			4,989
14,15,16		129,146		-		-		31,015		3,641		163,802	1			19,657
Collectively evaluated for impairment		7,613,746		1,641,672		325,382		1,252,912		30,032		10,863,744	99			76,082
Individually evaluated for impairment		39,882		-		12,815		10,904		1,624		65,225	1			6,630
Purchased credit-impaired loans		4,858		-		-		23,696		1,729		30,283	-			2,605
Total commercial loans	$	7,658,486	$	1,641,672	$	338,197	$	1,287,512	$	33,385	$	10,959,252	100	%	$	85,317


	March 31, 2014
			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	$	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(b)	$	6,688,024	$	709,552	$	348,658	$	1,073,014	$	40,516	$	8,859,764	100	%	$	86,367

Balances as of March 31, 2015 and 2014, presented net of $26.2 million and $26.6 million, respectively, in lower of cost or market (“LOCOM”) valuation allowance. Based on the underlying structure of the notes, the highest possible internal grade is "13".
March 31, 2014, excludes PCI loans amounting to $45.6 million ($1.9 million of allowance).

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 credit 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, 2015 and 2014:

HELOC
	March 31, 2015						March 31, 2014
			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	$	51,626		707		700	$	73,926		710		703
2003		95,043		721		707		130,144		723		709
2004		258,974		723		707		375,252		726		715
2005		421,315		731		720		517,957		732		721
2006		321,702		739		726		375,022		740		727
2007		342,531		744		728		396,409		743		728
2008		188,111		753		748		217,360		753		748
2009		97,279		751		742		113,703		751		746
2010		92,777		753		749		110,958		753		748
2011		92,484		758		753		110,815		758		754
2012		112,955		760		758		133,618		759		759
2013		142,772		757		756		169,429		760		757
2014		121,991		762		763		23,224		756		755
2015		25,250		759		756		-		-		-
Total	$	2,364,810		742		732	$	2,747,817		741		731


R/E Installment Loans	March 31, 2015						March 31, 2014
			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	$	11,786		679		687	$	21,069		681		687
2003		44,729		713		721		68,747		715		724
2004		37,944		699		695		51,187		701		699
2005		115,702		715		710		150,669		716		711
2006		126,225		712		702		165,515		715		700
2007		187,510		722		707		236,727		724		708
2008		60,538		718		712		80,067		722		718
2009		26,812		737		727		37,048		742		733
2010		95,017		747		756		120,128		748		754
2011		267,079		760		759		323,992		760		759
2012		586,729		764		765		675,368		764		765
2013		460,196		756		758		509,103		757		753
2014		450,765		756		754		70,577		756		750
2015		86,975		757		758		-		-		-
Total	$	2,558,007		749		747	$	2,510,197		746		743


Permanent Mortgage	March 31, 2015						March 31, 2014
			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	$	136,848		723		718	$	178,765		725		728
2004		16,484		712		715		21,398		712		691
2005		32,563		736		732		38,586		737		715
2006		59,636		732		726		72,413		728		706
2007		183,359		733		719		213,580		733		711
2008		82,818		741		712		97,500		741		712
Total	$	511,708		730		717	$	622,242		730		712

Nonaccrual and Past Due Loans


The following table reflects accruing and non-accruing loans by class on March 31, 2015:

	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	$	7,627,209	$	5,291	$	251	$	$7,632,751	$	1,441	$	10,445	$	8,991	$	$20,877	$	$7,653,628
Loans to mortgage companies		1,640,638		915		-		1,641,553		-		-		119		119		1,641,672
TRUPS (a)		325,382		-		-		325,382		-		-		12,815		12,815		338,197
Purchased credit-impaired loans		4,192		-		666		4,858		-		-		-		-		4,858
Total commercial (C&I)		9,597,421		6,206		917		9,604,544		1,441		10,445		21,925		33,811		9,638,355
Commercial real estate:
Income CRE		1,249,793		687		-		1,250,480		1,454		2,817		9,065		13,336		1,263,816
Residential CRE		31,591		65		-		31,656		-		-		-		-		31,656
Purchased credit-impaired loans		21,817		-		3,608		25,425		-		-		-		-		25,425
Total commercial real estate		1,303,201		752		3,608		1,307,561		1,454		2,817		9,065		13,336		1,320,897
Consumer real estate:
HELOC		2,250,415		20,698		10,362		2,281,475		66,743		5,075		11,517		83,335		2,364,810
R/E installment loans		2,502,363		11,975		5,204		2,519,542		27,748		2,576		5,741		36,065		2,555,607
Purchased credit-impaired loans		2,308		4		88		2,400		-		-		-		-		2,400
Total consumer real estate		4,755,086		32,677		15,654		4,803,417		94,491		7,651		17,258		119,400		4,922,817
Permanent mortgage		464,677		8,019		6,085		478,781		16,710		2,752		13,465		32,927		511,708
Credit card & other
Credit card		177,042		1,467		1,440		179,949		-		-		-		-		179,949
Other		156,478		916		239		157,633		-		-		755		755		158,388
Purchased credit-impaired loans		9		-		-		9		-		-		-		-		9
Total credit card & other		333,529		2,383		1,679		337,591		-		-		755		755		338,346
Total loans, net of unearned	$	16,453,914	$	50,037	$	$27,943	$	$16,531,894		$114,096	$	23,665	$	$62,468	$	$200,229	$	$16,732,123

Total TRUPS includes LOCOM valuation allowance of $26.2 million.


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

Total TRUPS includes LOCOM valuation allowance of $26.6 million.

Troubled Debt Restructurings

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 extension of the maturity date, reductions of the interest rate (which may make the rate lower than current market for a new loan with similar risk), reduction or forgiveness 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 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.

Despite the absence of a loan modification, the discharge of personal liability through bankruptcy proceedings is considered a concession. As a result, FHN classifies all non-reaffirmed residential real estate loans discharged in Chapter 7 bankruptcy as nonaccruing TDRs.

On March 31, 2015 and 2014, FHN had $317.8 million and $353.4 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $62.1 million and $65.8 million, or 20 percent as of March 31, 2015, and 19 percent as of March 31, 2014. Additionally, $78.0 million and $137.0 million of loans held-for-sale as of March 31, 2015 and 2014, respectively were classified as TDRs.


The following table reflects portfolio loans that were classified as TDRs during the three months ended March 31, 2015 and 2014:

		2015					2014
			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		2	$	1,388	$	1,325	-	$	-	$	-
	Total commercial (C&I)	2		1,388		1,325	-		-		-
Consumer real estate:
HELOC		37		3,727		3,707	67		5,790		5,768
R/E installment loans		16		1,354		1,377	72		5,143		5,102
	Total consumer real estate	53		5,081		5,084	139		10,933		10,870
Permanent mortgage		2		321		321	12		4,593		4,087
Credit card & other		6		28		27	20		87		85
Total troubled debt restructurings		63	$	6,818	$	6,757	171	$	15,613	$	15,042


The following table presents TDRs which re-defaulted during the three months ended March 31, 2015 and 2014, 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 days past due.


		2015			2014
			Recorded			Recorded
(Dollars in thousands)		Number	Investment		Number	Investment
Commercial (C&I):
General C&I		-	$	-	4	$	512
	Total commercial (C&I)	-		-	4		512
Commercial real estate:
Income CRE		-		-	2		389
	Total commercial real estate	-		-	2		389
Consumer real estate:
HELOC		1		30	4		307
R/E installment loans		1		86	3		118
	Total consumer real estate	2		116	7		425
Credit card & other		1		3	2		4
Total troubled debt restructurings		3	$	119	15	$	1,330

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.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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