FORM 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to        

Commission File Number 001-15185

 

 

First Horizon National Corporation

(Exact name of registrant as specified in its charter)

 

 

 

TN   62-0803242

(State or other jurisdiction

incorporation of organization)

 

(IRS Employer

Identification No.)

165 MADISON AVENUE

MEMPHIS, TENNESSEE

  38103
(Address of principal executive office)   (Zip Code)

(Registrant’s telephone number, including area code) (901) 523-4444

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   x    Accelerated filer   ¨
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

   Outstanding on March 31, 2013
Common Stock, $.625 par value    241,224,839

 

 

 


Table of Contents

Table of Contents

FIRST HORIZON NATIONAL CORPORATION

INDEX

 

Part I. Financial Information

  

Item1. Financial Statements

     2   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     71   

Item 3. Quantitative and Qualitative Disclosures about Market Risk

     110   

Item 4. Controls and Procedures

     110   

Part II. Other Information

  

Item 1. Legal Proceedings

     111   

Item 1A. Risk Factors

     111   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     111   

Item 3. Defaults Upon Senior Securities

     111   

Item 4. Mine Safety Disclosures

     111   

Item 5. Other Information

     111   

Item 6. Exhibits

     112   

Signatures

     113   

Exhibit Index

     114   

Exhibit 10.1

  

Exhibit 10.2

  

Exhibit 10.3

  

Exhibit 10.4

  

Exhibit 10.5

  

Exhibit 31(a)

  

Exhibit 31(b)

  

Exhibit 32(a)

  

Exhibit 32(b)

  


Table of Contents

PART I.

FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The Consolidated Condensed Statements of Condition

 

3

The Consolidated Condensed Statements of Income

 

4

The Consolidated Condensed Statements of Comprehensive Income

 

5

The Consolidated Condensed Statements of Equity

 

6

The Consolidated Condensed Statements of Cash Flows

 

7

The Notes to Consolidated Condensed Financial Statements

 

8

Note 1 Financial Information

 

8

Note 2 Investment Securities

 

9

Note 3 Loans

 

11

Note 4 Mortgage Servicing Rights

 

22

Note 5 Intangible Assets

 

23

Note 6 Other Income and Other Expense

 

24

Note 7 Changes in Accumulated Other Comprehensive Income Balances

 

25

Note 8 Earnings Per Share

 

26

Note 9 Contingencies and Other Disclosures

 

27

Note 10 Pensions, Savings, and Other Employee Benefits

 

37

Note 11 Business Segment Information

 

39

Note 12 Loan Sales and Securitizations

 

41

Note 13 Variable Interest Entities

 

43

Note 14 Derivatives

 

48

Note 15 Master Netting and Similar Agreements—Repurchase, Reverse Repurchase, and Securities Borrowing and Lending Transactions

 

54

Note 16 Fair Value of Assets & Liabilities

 

55

Note 17 Restructuring, Repositioning, and Efficiency

 

70

This financial information reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial condition and results of operations for the interim periods presented.

 

2


Table of Contents

CONSOLIDATED CONDENSED STATEMENTS OF CONDITION

 

      First Horizon National Corporation  
     March 31     December 31  

(Dollars in thousands, except restricted and share amounts)(Unaudited)

   2013     2012     2012  

Assets:

      

Cash and due from banks (Restricted—$.2 million on March 31, 2013; $1.7 million on March 31, 2012; and $—on December 31, 2012)

   $ 275,262     $ 349,604     $ 469,879  

Federal funds sold

     33,738       18,732       34,492  

Securities purchased under agreements to resell (Note 15)

     732,696       595,973       601,891  
  

 

 

   

 

 

   

 

 

 

Total cash and cash equivalents (Restricted—$.2 million on March 31, 2013; $1.7 million on March 31, 2012; and $—on December 31, 2012)

     1,041,696       964,309       1,106,262  
  

 

 

   

 

 

   

 

 

 

Interest-bearing cash

     431,182       761,098       353,373  

Trading securities

     1,397,746       1,238,041       1,262,720  

Loans held-for-sale

     390,874       431,905       401,937  

Securities available-for-sale (Note 2)

     3,190,219       3,296,603       3,061,808  

Loans, net of unearned income (Restricted—$.1 billion on March 31, 2013 and December 31, 2012; and $.2 billion on March 31, 2012) (Note 3)

     15,889,670       15,971,330       16,708,582  

Less: Allowance for loan losses (Restricted—$3.7 million on March 31, 2013; $10.4 million on March 31, 2012; and $4.3 million on December 31, 2012) (Note 3)

     265,218       346,016       276,963  
  

 

 

   

 

 

   

 

 

 

Total net loans (Restricted—$.1 billion on March 31, 2013, March 31, 2012 and December 31, 2012)

     15,624,452       15,625,314       16,431,619  
  

 

 

   

 

 

   

 

 

 

Mortgage servicing rights (Note 4)

     109,102       142,956       114,311  

Goodwill (Note 5)

     134,242       134,242       134,242  

Other intangible assets, net (Note 5)

     21,772       25,638       22,700  

Capital markets receivables

     533,306       522,001       303,893  

Premises and equipment, net

     299,740       314,903       303,273  

Real estate acquired by foreclosure

     54,672       78,947       60,690  

Derivative assets (Note 14)

     274,332       340,337       292,472  

Other assets (Restricted—$1.6 million on March 31, 2013; $4.5 million on March 31, 2012; and $1.9 million on December 31, 2012)

     1,663,092       1,802,675       1,670,840  
  

 

 

   

 

 

   

 

 

 

Total assets (Restricted—$.1 billion on March 31, 2013 and December 31, 2012; and $.2 billion on March 31, 2012)

   $ 25,166,427     $ 25,678,969     $ 25,520,140  
  

 

 

   

 

 

   

 

 

 

Liabilities and equity:

      

Deposits:

      

Savings

   $ 6,498,832     $ 6,615,289     $ 6,705,496  

Time deposits

     988,375       1,142,249       1,019,938  

Other interest-bearing deposits

     3,740,257       3,500,445       3,798,313  

Certificates of deposit $100,000 and more

     522,958       707,590       503,490  
  

 

 

   

 

 

   

 

 

 

Interest-bearing

     11,750,422       11,965,573       12,027,237  

Noninterest-bearing

     4,454,045       4,969,597       4,602,472  
  

 

 

   

 

 

   

 

 

 

Total deposits

     16,204,467       16,935,170       16,629,709  
  

 

 

   

 

 

   

 

 

 

Federal funds purchased

     1,361,670       1,487,469       1,351,023  

Securities sold under agreements to repurchase (Note 15)

     488,010       313,765       555,438  

Trading liabilities

     781,306       567,571       564,429  

Other short-term borrowings

     186,898       181,570       441,201  

Term borrowings (Restricted—$.1 billion on March 31, 2013 and December 31, 2012; and $.2 billion on March 31, 2012)

     2,197,864       2,340,706       2,226,482  

Capital markets payables

     461,333       361,018       296,450  

Derivative liabilities (Note 14)

     199,999       234,188       202,269  

Other liabilities

     685,153       583,339       743,933  
  

 

 

   

 

 

   

 

 

 

Total liabilities (Restricted—$.1 billion on March 31, 2013 and December 31, 2012; and $.2 billion on March 31, 2012)

     22,566,700       23,004,796       23,010,934  
  

 

 

   

 

 

   

 

 

 

Equity:

      

First Horizon National Corporation Shareholders’ Equity:

      

Preferred stock—Series A, non-cumulative perpetual, no par value, liquidation preference of $100,000 per share—(shares authorized—1,000; shares issued—1,000 on March 31, 2013; and $—on March 31, 2012 and December 31, 2012)

     95,624       —         —    

Common stock—$.625 par value (shares authorized—400,000,000; shares issued—241,224,839 on March 31, 2013; 252,666,860 on March 31, 2012; and 243,597,780 on December 31, 2012 )

     150,766       157,917       152,249  

Capital surplus

     1,461,292       1,560,343       1,488,463  

Undivided profits

     748,427       785,361       719,672  

Accumulated other comprehensive loss, net (Note 7)

     (151,639     (124,613     (146,343
  

 

 

   

 

 

   

 

 

 

Total First Horizon National Corporation Shareholders’ Equity

     2,304,470       2,379,008       2,214,041  
  

 

 

   

 

 

   

 

 

 

Noncontrolling interest

     295,257       295,165       295,165  
  

 

 

   

 

 

   

 

 

 

Total equity

     2,599,727       2,674,173       2,509,206  
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 25,166,427     $ 25,678,969     $ 25,520,140  
  

 

 

   

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

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

 

3


Table of Contents

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

 

      First Horizon National Corporation  
     Three Months Ended
March 31
 

(Dollars and shares in thousands except per share data)(Unaudited)

   2013      2012  

Interest income:

     

Interest and fees on loans

   $ 153,285      $ 161,577  

Interest on investment securities

     20,862        26,306  

Interest on loans held-for-sale

     3,502        3,738  

Interest on trading securities

     8,281        9,436  

Interest on other earning assets

     469        446  
  

 

 

    

 

 

 

Total interest income

     186,399        201,503  
  

 

 

    

 

 

 

Interest expense:

     

Interest on deposits:

     

Savings

     4,397        5,619  

Time deposits

     4,217        5,916  

Other interest-bearing deposits

     1,145        1,518  

Certificates of deposit $100,000 and more

     1,561        2,306  

Interest on trading liabilities

     3,196        2,515  

Interest on short-term borrowings

     1,306        1,365  

Interest on term borrowings

     9,195        10,335  
  

 

 

    

 

 

 

Total interest expense

     25,017        29,574  
  

 

 

    

 

 

 

Net interest income

     161,382        171,929  

Provision for loan losses

     15,000        8,000  
  

 

 

    

 

 

 

Net interest income after provision for loan losses

     146,382        163,929  
  

 

 

    

 

 

 

Noninterest income:

     

Capital markets

     79,163        106,743  

Deposit transactions and cash management

     27,656        28,741  

Mortgage banking

     9,373        23,341  

Brokerage, management fees and commissions

     9,348        8,496  

Trust services and investment management

     6,328        5,808  

Insurance commissions

     600        568  

Equity securities gains/(losses), net

     24        —    

Debt securities gains/(losses), net

     —          328  

Gain on divestiture

     —          200  

All other income and commissions (Note 6)

     23,935        28,216  
  

 

 

    

 

 

 

Total noninterest income

     156,427        202,441  
  

 

 

    

 

 

 

Adjusted gross income after provision for loan losses

     302,809        366,370  
  

 

 

    

 

 

 

Noninterest expense:

     

Employee compensation, incentives, and benefits (quarter ended March 31, 2013 includes $2.5 million of expense associated with pension and post-retirement plans reclassified from accumulated other comprehensive income)

     139,184        175,458  

Occupancy

     12,822        12,119  

Legal and professional fees

     11,171        6,067  

Computer software

     10,076        9,465  

Contract employment and outsourcing

     9,039        11,115  

Operations services

     8,070        9,127  

Equipment rentals, depreciation, and maintenance

     7,820        7,616  

FDIC premium expense

     6,011        6,336  

Communications and courier

     4,437        4,499  

Foreclosed real estate

     1,439        4,170  

Miscellaneous loan costs

     996        1,327  

Amortization of intangible assets

     928        973  

Repurchase and foreclosure provision

     —          49,256  

All other expense (Note 6)

     28,547        24,466  
  

 

 

    

 

 

 

Total noninterest expense

     240,540        321,994  
  

 

 

    

 

 

 

Income/(loss) before income taxes

     62,269        44,376  

Provision/(benefit) for income taxes (quarter ended March 31, 2013 includes $1.0 million income tax benefit reclassified from accumulated other comprehensive income)

     17,730        10,570  
  

 

 

    

 

 

 

Income/(loss) from continuing operations

     44,539        33,806  

Income/(loss) from discontinued operations, net of tax (a)

     430        (435
  

 

 

    

 

 

 

Net income/(loss)

   $ 44,969      $ 33,371  
  

 

 

    

 

 

 

Net income attributable to noncontrolling interest

     2,813        2,844  
  

 

 

    

 

 

 

Net income/(loss) attributable to controlling interest

   $ 42,156      $ 30,527  
  

 

 

    

 

 

 

Preferred stock dividends

     1,188        —    
  

 

 

    

 

 

 

Net income/(loss) available to common shareholders

   $ 40,968      $ 30,527  
  

 

 

    

 

 

 

Basic earnings/(loss) per share from continuing operations (Note 8)

   $ 0.17      $ 0.12  
  

 

 

    

 

 

 

Diluted earnings/(loss) per share from continuing operations (Note 8)

   $ 0.17      $ 0.12  
  

 

 

    

 

 

 

Basic earnings/(loss) per share (Note 8)

   $ 0.17      $ 0.12  
  

 

 

    

 

 

 

Diluted earnings/(loss) per share (Note 8)

   $ 0.17      $ 0.12  
  

 

 

    

 

 

 

Weighted average common shares (Note 8)

     240,870        253,527  
  

 

 

    

 

 

 

Diluted average common shares (Note 8)

     242,799        255,369  
  

 

 

    

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

(a) Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of Income/(loss) from discontinued operations, net of tax have been attributed solely to FHN as the controlling interest holder.

 

4


Table of Contents

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

 

     First Horizon National Corporation  
     Three Months Ended
March 31
 

(Dollars in thousands) (Unaudited)

   2013     2012  

Net income/(loss)

   $ 44,969     $ 33,371  

Other comprehensive income/(loss), net of tax:

    

Unrealized fair value adjustments:

    

Securities available-for-sale

     (6,659     7  

Recognized pension and other employee benefit plans net periodic benefit costs

     1,363       5,536  
  

 

 

   

 

 

 

Other comprehensive income/(loss)

     (5,296     5,543  
  

 

 

   

 

 

 

Comprehensive income/(loss)

     39,673       38,914  
  

 

 

   

 

 

 

Comprehensive income attributable to noncontrolling interest

     2,813       2,844  
  

 

 

   

 

 

 

Comprehensive income/(loss) attributable to controlling interest

   $ 36,860     $ 36,070  
  

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

5


Table of Contents

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY

 

     First Horizon National Corporation  
     2013     2012  

(Dollars in thousands except per share data)(Unaudited)

   Controlling Interest     Noncontrolling
Interest
    Total     Controlling
Interest
    Noncontrolling
Interest
    Total  

Balance, January 1

   $ 2,214,041     $ 295,165     $ 2,509,206     $ 2,389,472     $ 295,165     $ 2,684,637  

Net income/(loss)

     42,156       2,813       44,969       30,527       2,844       33,371  

Other comprehensive income/(loss) (a)

     (5,296     —         (5,296     5,543       —         5,543  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income/(loss)

     36,860       2,813       39,673       36,070       2,844       38,914  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Preferred stock issuance (1,000 shares issued at $100,000 per share net of offering costs)

     95,624       —         95,624       —         —         —    

Cash dividends declared:

            

Preferred stock ($1,188.33/share)

     (1,188     —         (1,188     —         —         —    

Common stock ($.05/share and $.01/share for the quarters ended March 31, 2013 and 2012, respectively)

     (12,214     —         (12,214     (2,530     —         (2,530

Common stock repurchased (b)

     (32,495     —         (32,495     (46,624     —         (46,624

Common stock issued for:

            

Stock options and restricted stock—equity awards

     16       —         16       —           —         —    

Stock-based compensation expense

     4,220       —         4,220       3,858       —         3,858  

Dividends declared—noncontrolling interest of subsidiary preferred stock

     —         (2,813     (2,813     —         (2,844     (2,844

Tax benefit reversals—stock-based compensation plans

     (480     —         (480     (1,238     —         (1,238

Real estate investment trust (“REIT”) preferred stock issuance

     —         92       92       —         —         —    

Other changes in equity

     86       —          86       —         —          —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance, March 31

   $ 2,304,470     $ 295,257     $ 2,599,727     $ 2,379,008     $ 295,165     $ 2,674,173  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

(a) Due to the nature of the preferred stock issued by FHN and its subsidiaries, all components of Other comprehensive income/(loss) have been attributed solely to FHN as the controlling interest holder.
(b) Quarters ended March 31, 2013 and 2012, include $30.0 million and $44.5 million, respectively, repurchased under the share repurchase program launched in fourth quarter 2011.

 

6


Table of Contents

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

 

     Three Months Ended March 31  

(Dollars in thousands)

   2013     2012  

Operating Activities

    

Net income/(loss)

   $ 44,969     $ 33,371  

Adjustments to reconcile net income/(loss) to net cash provided/(used) by operating activities:

    

Provision for loan losses

     15,000       8,000  

Provision/(benefit) for deferred income taxes

     9,819       8,431  

Depreciation and amortization of premises and equipment

     8,802       8,717  

Amortization of intangible assets

     928       973  

Net other amortization and accretion

     9,822       19,596  

Net (increase)/decrease in derivatives

     (1,732     (3,374

Market value adjustment on mortgage servicing rights

     (833     (4,471

Repurchase and foreclosure provision

     —         49,256  

Fair value adjustment to foreclosed real estate

     1,018       5,225  

Litigation and regulatory matters

     5,170       153  

(Gains)/losses on divestitures

     (638     —    

Stock-based compensation expense

     4,220       3,858  

Tax benefit reversals stock-based compensation plans

     480       1,238  

Equity securities (gains)/losses, net

     (24     —    

Debt securities gains, net

     —         (328

Net (gain)/losses on sale/disposal of fixed assets

     387       68  

Net (increase)/decrease in:

    

Trading securities

     (136,439     (251,488

Loans held-for-sale

     11,063       (18,008

Capital markets receivables

     (229,413     (357,014

Interest receivable

     (9,932     (7,844

Other assets

     11,421       (21,650

Net increase/(decrease) in:

    

Capital markets payables

     164,883       196,310  

Interest payable

     15,323       15,711  

Other liabilities

     (88,882     (69,302

Trading liabilities

     216,877       220,286  
  

 

 

   

 

 

 

Total adjustments

     7,320       (195,657
  

 

 

   

 

 

 

Net cash provided/(used) by operating activities

     52,289       (162,286
  

 

 

   

 

 

 

Investing Activities

    

Available-for-sale securities:

    

Sales

     —         39,097  

Maturities

     300,178       202,993  

Purchases

     (442,309     (474,673

Premises and equipment:

    

Purchases

     (5,656     (2,435

Net (increase)/decrease in:

    

Loans

     795,824       378,681  

Interests retained from securitizations classified as trading securities

     1,413       1,664  

Interest-bearing cash

     (77,809     (308,242

Cash receipts related to divestitures

     1,638       —    
  

 

 

   

 

 

 

Net cash provided/(used) by investing activities

     573,279       (162,915
  

 

 

   

 

 

 

Financing Activities

    

Common stock:

    

Stock options exercised

     16       —    

Cash dividends paid

     (2,488     (2,575

Repurchase of shares (a)

     (32,495     (46,624

Tax benefit reversals stock-based compensation plans

     (480     (1,238

Preferred stock issuance

     95,624       —    

Cash dividends paid—preferred stock—noncontrolling interest

     (2,875     (2,844

Term borrowings:

    

Payments/maturities

     (14,306     (131,686

Increase in restricted and secured term borrowings

     3,196       859  

Net increase/(decrease) in:

    

Deposits

     (425,242     722,161  

Short-term borrowings

     (311,084     (76,798
  

 

 

   

 

 

 

Net cash provided/(used) by financing activities

     (690,134     461,255  
  

 

 

   

 

 

 

Net increase/(decrease) in cash and cash equivalents

     (64,566     136,054  
  

 

 

   

 

 

 

Cash and cash equivalents at beginning of period

     1,106,262       828,255  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,041,696     $ 964,309  
  

 

 

   

 

 

 

Supplemental Disclosures

    

Total interest paid

   $ 9,285     $ 13,708  

Total taxes paid

     1,488       27,927  

Total taxes refunded

     2,377       617  

Transfer from loans to other real estate owned

     1,217       10,207  
  

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

(a) Quarters ended March 31, 2013 and 2012, include $30.0 million and $44.5 million, respectively, repurchased under the share repurchase program launched in fourth quarter 2011.

 

7


Table of Contents

Notes to the Consolidated Condensed Financial Statements

Note 1 – Financial Information

Basis of Accounting. The unaudited interim consolidated condensed financial statements of First Horizon National Corporation (“FHN”), including its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America and follow general practices within the industries in which it operates. This preparation requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are based on information available as of the date of the financial statements and could differ from actual results. In the opinion of management, all necessary adjustments have been made for a fair presentation of financial position and results of operations for the periods presented. These adjustments are of a normal recurring nature unless otherwise disclosed in the filing. The operating results for the interim 2013 period are not necessarily indicative of the results that may be expected going forward. For further information, refer to the audited consolidated financial statements in the 2012 Annual Report to shareholders.

Summary of Accounting Changes. Effective January 1, 2013, FHN adopted the provisions of FASB ASU 2011-11, “Balance Sheet: Disclosures about Offsetting Assets and Liabilities”. ASU 2011-11 creates new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. ASU 2011-11 requires entities to disclose both gross and net information about both instruments and transactions eligible for offset in the balance sheet as well as instruments and transactions subject to an agreement similar to a master netting arrangement. The scope of ASU 2011-11 includes derivatives, sale and repurchase agreements/reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The provisions of ASU 2011-11 are effective for periods beginning on or after January 1, 2013, with retrospective application to all periods presented in the financial statements required. Additionally in January 2013, FASB issued ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, that narrowed the scope of ASU 2011-11. Based on this amendment, ASU 2011-11 applies to derivatives, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. Upon adoption of ASU 2011-11, FHN revised its disclosures accordingly. The adoption of the provisions of ASU 2011-11 had no effect on FHN’s statement of condition, results of operations, or cash flows.

Effective January 1, 2013, FHN adopted the provisions of FASB ASU 2013-02, “Comprehensive Income: Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income”. ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements but modified interim disclosure requirements such that changes in accumulated other comprehensive income must be disclosed in interim filings. The provisions of ASU 2013-02 are effective for periods beginning after December 15, 2012, with prospective application to transactions or modifications of existing transactions that occur on or after the effective date. Upon adoption of the provisions of ASU 2013-02 on January 1, 2013, FHN revised its financial statements and disclosures accordingly.

 

8


Table of Contents

Note 2 – Investment Securities

The following tables summarize FHN’s available for sale (“AFS”) securities on March 31, 2013 and 2012:

 

      March 31, 2013  

(Dollars in thousands)

   Amortized
Cost
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
    Fair
Value
 

Securities available for sale:

          

U.S. treasuries

   $ 39,992      $ 2      $ —       $ 39,994  

Government agency issued mortgage-backed securities (“MBS”)

     1,009,283        56,649        (381     1,065,551  

Government agency issued collateralized mortgage obligations (“CMO”)

     1,826,314        24,049        (1,010     1,849,353  

Other U.S. government agencies

     3,068        208        —         3,276  

States and municipalities

     15,255        —          —         15,255  

Equity and other (a)

     216,780        10        —         216,790  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total securities available for sale (b)

   $ 3,110,692      $ 80,918      $ (1,391   $ 3,190,219  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

(a) Includes restricted investments in FHLB-Cincinnati stock of $125.5 million and FRB stock of $66.0 million. The remainder is money market, venture capital, and cost method investments.
(b) Includes $2.9 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

 

     March 31, 2012  

(Dollars in thousands)

   Amortized
Cost
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
    Fair
Value
 

Securities available for sale:

          

U.S. treasuries

   $ 40,011      $ 26      $ —       $ 40,037  

Government agency issued MBS

     1,352,827        74,936        (734     1,427,029  

Government agency issued CMO

     1,537,732        35,104        —         1,572,836  

Other U.S. government agencies

     14,121        426        —         14,547  

States and municipalities

     18,070        —          —         18,070  

Equity and other (a)

     224,061        23        —         224,084  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total securities available for sale (b)

   $ 3,186,822      $ 110,515      $ (734   $ 3,296,603  
  

 

 

    

 

 

    

 

 

   

 

 

 

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

 

(a) Includes restricted investments in FHLB-Cincinnati stock of $125.5 million and FRB stock of $66.1 million. The remainder is money market, venture capital, and cost method investments.
(b) Includes $2.8 billion of securities pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes.

National banks chartered by the federal government are, by law, members of the Federal Reserve System. Each member bank is required to own stock in its regional Federal Reserve Bank (“FRB”). Given this requirement, FRB stock may not be sold, traded, or pledged as collateral for loans. Membership in the Federal Home Loan Bank (“FHLB”) network requires ownership of capital stock. Member banks are entitled to borrow funds from the FHLB and are required to pledge mortgage loans as collateral. Investments in the FHLB are non-transferable and, generally, membership is maintained primarily to provide a source of liquidity as needed.

 

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Table of Contents

Note 2 – Investment Securities (Continued)

 

The amortized cost and fair value by contractual maturity for the available for sale securities portfolio on March 31, 2013 are provided below:

 

      Available for Sale  

(Dollars in thousands)

   Amortized
Cost
     Fair Value  

Within 1 year

   $ 39,992      $ 39,994  

After 1 year; within 5 years

     4,568        4,776  

After 5 years; within 10 years

     —          —    

After 10 years

     13,755        13,755  
  

 

 

    

 

 

 

Subtotal

     58,315        58,525  
  

 

 

    

 

 

 

Government agency issued MBS and CMO

     2,835,597        2,914,904  

Equity and other

     216,780        216,790  
  

 

 

    

 

 

 

Total

   $ 3,110,692      $ 3,190,219  
  

 

 

    

 

 

 

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The table below provides information on gross gains and gross losses from investment securities for the three months ended March 31:

 

      Available for sale  

(Dollars in thousands)

       2013             2012      

Gross gains on sales of securities

   $ 30     $ 328  

Gross losses on sales of securities

     (6     —    
  

 

 

   

 

 

 

Net gain/(loss) on sales of securities (a)

   $ 24     $ 328  
  

 

 

   

 

 

 

Net other than temporary impairment (“OTTI”) recorded

     —         —    
  

 

 

   

 

 

 

Total securities gain/(loss), net

   $ 24     $ 328  
  

 

 

   

 

 

 

 

(a) Proceeds from sales for the three months ended March 31, 2012 were $39.1 million. Proceeds for the three months ended March 31, 2013 were not material.

The following table provides information on investments within the available for sale portfolio that had unrealized losses on March 31, 2013 and 2012:

      On March 31, 2013  
     Less than 12 months     12 months or longer      Total  

(Dollars in thousands)

   Fair
Value
     Unrealized
Losses
    Fair
Value
     Unrealized
Losses
     Fair
Value
     Unrealized
Losses
 

Government agency issued CMO

   $ 305,318      $ (1,010   $ —        $ —        $ 305,318      $ (1,010

Government agency issued MBS

     44,095        (381     —          —          44,095        (381
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total temporarily impaired securities

   $ 349,413      $ (1,391   $ —        $ —        $ 349,413      $ (1,391 )
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

 

      On March 31, 2012  
     Less than 12 months     12 months or longer      Total  

(Dollars in thousands)

   Fair
Value
     Unrealized
Losses
    Fair
Value
     Unrealized
Losses
     Fair
Value
     Unrealized
Losses
 

Government agency issued MBS

   $ 101,397      $ (734   $ —        $ —        $ 101,397      $ (734
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total temporarily impaired securities

   $ 101,397      $ (734   $ —        $ —        $ 101,397      $ (734
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

FHN has reviewed investment securities that were in unrealized loss positions in accordance with its accounting policy for OTTI and does not consider them other-than-temporarily impaired. For debt securities with unrealized losses, FHN does not intend to sell them and it is more-likely-than-not that FHN will not be required to sell them prior to recovery. The decline in value is primarily attributable to interest rates and not credit losses. For equity securities, FHN has both the ability and intent to hold these securities for the time necessary to recover the amortized cost.

 

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Table of Contents

Note 3 – Loans

The following table provides the balance of loans by portfolio segment as of March 31, 2013 and 2012, and December 31, 2012:

 

      March 31      December 31  

(Dollars in thousands)

   2013      2012      2012  

Commercial:

        

Commercial, financial, and industrial

   $ 8,091,186      $ 7,705,153      $ 8,796,956  

Commercial real estate

        

Income CRE

     1,062,588        1,247,089        1,109,930  

Residential CRE

     53,291        99,837        58,305  

Retail:

        

Consumer real estate (a)

     5,590,180        5,858,821        5,688,703  

Permanent mortgage (b)

     793,282        788,700        765,583  

Credit card & other

     299,143        271,730        289,105  
  

 

 

    

 

 

    

 

 

 

Loans, net of unearned income

   $ 15,889,670      $ 15,971,330      $ 16,708,582  

Allowance for loan losses

     265,218        346,016        276,963  
  

 

 

    

 

 

    

 

 

 

Total net loans

   $ 15,624,452      $ 15,625,314      $ 16,431,619  
  

 

 

    

 

 

    

 

 

 

 

(a) Balances as of March 31, 2013 and 2012, and December 31, 2012 include $386.4 million, $467.0 million, and $402.4 million of restricted and secured real estate loans, respectively. See Note 13—Variable Interest Entities for additional information.
(b) Balances as of March 31, 2013 and 2012, and December 31, 2012 include $13.0 million, $38.0 million and $13.2 million of restricted and secured real estate loans, respectively. See Note 13—Variable Interest Entities for additional information.

Components of the Loan Portfolio

For purposes of this disclosure, the loan portfolio was disaggregated into segments and then further disaggregated into classes for certain disclosures. A portfolio segment is defined 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 an entity’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, and the trust preferred loans (“TRUPs”)(i.e., loans to bank and insurance-related businesses) portfolio. Loans to mortgage companies includes commercial lines of credit to qualified mortgage companies exclusively 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 commercial real estate include income CRE and residential CRE. Retail loan portfolio segments include consumer real estate, permanent mortgage, and the credit card and other portfolio. Retail classes include HELOC and real estate (“R/E”) installment 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 loans secured by residential real estate (41 percent of total loans), the majority of which is in the consumer real estate portfolio (35 percent of total loans). FHN had loans to mortgage companies totaling $1.1 billion (14 percent of the C&I portfolio, or 7 percent of total loans) as of March 31, 2013. Additionally, FHN had a sizeable portfolio of bank-related loans (including TRUPs) totaling $0.5 billion (6 percent of the C&I portfolio, or 3 percent of total loans).

Regulatory Focus on Consumer Loan Accounting and Reporting

In first quarter 2012, the Office of the Comptroller of Currency (“OCC”) issued interagency guidance related to ALLL estimation and nonaccrual practices, and risk management policies for junior lien loans. As a result, FHN modified its nonaccrual policies to place current second liens on nonaccrual if the first lien is owned or serviced by FHN and that first lien is 90 or more days past due. Additionally, FHN enhanced its ALLL methodology to qualitatively estimate probable incurred losses for all current second liens that are behind first liens with performance issues for which FHN does not own or service the first lien. During 2012 and continuing into 2013, FHN has been and is evaluating data on first liens provided by third parties, including vendors, to determine if it may be reasonably relied upon in order to predict performance of the associated second liens for which FHN does not own or service the first lien. FHN is working to have a vendor selected in the first half of 2013. Therefore, methodologies, policies, and practices related to the ALLL and/or nonaccrual accounting and reporting may be revised in the future to incorporate usage of such data if deemed predictive of loan performance. It is possible that if FHN determines that third party data may reasonably be relied upon, future additions to NPLs may be material.

Additionally, in third quarter 2012, the OCC clarified that residential real estate loans in which personal liability has been discharged through bankruptcy and not reaffirmed by the borrower are collateral dependent and should be reported as nonaccruing troubled debt restructuring (“TDR”). As a result, FHN charged-down such loans to the net realizable value of the collateral and the remaining

 

11


Table of Contents

Note 3 – Loans (Continued)

 

balances were reported as nonaccruing TDRs regardless of the loan’s delinquency status. The level of nonperforming loans and TDRs in the consumer real estate and permanent mortgage portfolios were affected by these regulatory actions as of March 31, 2013 relative to March 31, 2012.

Because of the composition of FHN’s residential real estate portfolios, this change most significantly impacted the consumer real estate portfolio segment.

Allowance for Loan Losses

The ALLL includes the following components: reserves for commercial loans evaluated based on pools of credit graded loans and reserves for pools of smaller-balance homogeneous retail loans, both determined in accordance with ASC 450-20-50. The reserve factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics and are subject to qualitative adjustments by management to reflect current events, trends, and conditions (including economic considerations and trends). The slow economic recovery, weak housing market, elevated unemployment levels, regulatory guidance, and both positive and negative portfolio segment-specific trends, are examples of additional factors considered by management in determining the ALLL. The ALLL also includes reserves determined in accordance with ASC 310-10-35 for loans determined by management to be individually impaired.

Commercial

For commercial loans, reserves are established using historical net loss factors by grade level, loan product, and business segment. An assessment of the quality of individual commercial loans is made utilizing credit grades assigned internally based on a dual grading system which estimates both the probability of default (“PD”) and loss severity in the event of default. PD grades range from 1-16 while estimated loss severities, or loss given default (“LGD”) grades, range from 1-12. This credit grading system is intended to identify and measure the credit quality of the loan portfolio by analyzing the migration of loans between grading categories. It is also integral to the estimation methodology utilized in determining the allowance for loan losses since an allowance is established for pools of commercial loans based on the credit grade assigned. The appropriate relationship team performs the process of categorizing commercial loans into the appropriate credit grades, initially as a component of the approval of the loan, and subsequently throughout the life of the loan as part of the servicing regimen. The proper loan grade for larger exposures is confirmed by a senior credit officer in the approval process. To determine the most appropriate credit grade for each loan, the credit risk grading system employs scorecards for particular categories of loans that consist of a number of objective and subjective measures that are weighted in a manner that produces a rank ordering of risk within pass-graded credits. Loan grading discipline is regularly reviewed by Credit Risk Assurance to determine if the process continues to result in accurate loan grading across the portfolio. FHN may utilize availability of guarantors/sponsors to support lending decisions during the credit underwriting process and when determining the assignment of internal loan grades.

Retail

The ALLL for smaller-balance homogenous retail loans is determined based on pools of similar loan types that have similar credit risk characteristics. FHN manages retail loan credit risk on a class basis. Reserves by portfolio are determined using segmented roll-rate models that incorporate various factors including historical delinquency trends, experienced loss frequencies, and experienced loss severities. Generally, reserves for retail loans reflect inherent losses in the portfolio that are expected to be recognized over the following twelve months.

Individually Impaired

Generally, classified nonaccrual commercial loans over $1 million and all commercial and consumer loans classified as TDRs are deemed to be impaired and are individually assessed for impairment measurement in accordance with ASC 310-10-35. For all commercial portfolio segments, commercial TDRs and other individually impaired commercial loans are measured based on the present value of expected future payments discounted at the loan’s effective interest rate (“the DCF method”), observable market prices, or for loans that are solely dependent on the collateral for repayment, the net realizable value. For loans measured using the DCF method or by observable market prices, if the recorded investment in the impaired loan exceeds this amount, a specific allowance is established as a component of the ALLL until such time as a loss is expected and recognized; however, for impaired collateral-dependent loans, FHN will charge off the full difference between the book value and the best estimate of net realizable value.

Generally, the allowance for TDRs in all consumer portfolio segments is determined by estimating the expected future cash flows using the modified interest rate (if an interest rate concession), incorporating payoff and net charge-off rates specific to the TDRs within the portfolio segment being assessed, and discounted using the pre-modification interest rate. The discount rates of variable rate TDRs are adjusted to reflect changes in the interest rate index in which the rates are tied. The discounted cash flows are then compared to the outstanding principal balance in order to determine required reserves. Residential real estate loans discharged through bankruptcy are collateral-dependent and are charged down to net realizable value.

 

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Table of Contents

Note 3 – Loans (Continued)

 

The following table provides a rollforward of the allowance for loan losses by portfolio segment for the three months ended March 31, 2013 and 2012:

 

(Dollars in thousands)

   C&I     Commercial
Real Estate
    Consumer
Real Estate
    Permanent
Mortgage
    Credit Card
and Other
    Total  

Balance as of January 1, 2012

   $ 130,413     $ 55,586     $ 165,077     $ 26,194     $ 7,081     $ 384,351  

Charge-offs

     (6,074     (9,619     (34,133     (4,638     (2,619     (57,083

Recoveries 

     4,514       496       4,139       523       1,076       10,748  

Provision 

     (9,275     (414     6,564       10,493       632       8,000  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of March 31, 2012

     119,578       46,049       141,647       32,572       6,170       346,016  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance—individually evaluated for impairment 

     29,147       7,976       32,300       16,722       241       86,386  

Allowance—collectively evaluated for impairment 

     90,431       38,073       109,347       15,850       5,929       259,630  

Loans, net of unearned as of March 31, 2012: 

            

Individually evaluated for impairment 

     151,219       110,123       117,556       102,033       1,028       481,959  

Collectively evaluated for impairment 

     7,553,934       1,236,803       5,741,265       686,667       270,702       15,489,371  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans, net of unearned

   $ 7,705,153     $ 1,346,926     $ 5,858,821     $ 788,700     $ 271,730     $ 15,971,330  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of January 1, 2013

   $ 96,191     $ 19,997     $ 128,949     $ 24,928     $ 6,898     $ 276,963  

Charge-offs

     (4,436     (1,381     (23,996     (3,387     (2,900     (36,100

Recoveries

     2,496       646       5,504       144       565       9,355  

Provision

     (8,146     (4,124     20,960       3,763       2,547       15,000  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of March 31, 2013

     86,105       15,138       131,417       25,448       7,110       265,218  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance—individually evaluated for impairment

     15,463       156       40,778       22,239       231       78,867  

Allowance—collectively evaluated for impairment

     70,642       14,982       90,639       3,209       6,879       186,351  

Loans, net of unearned as of March 31, 2013:

            

Individually evaluated for impairment

     111,036       43,501       165,927       136,430       747       457,641  

Collectively evaluated for impairment

     7,980,150       1,072,378       5,424,253       656,852       298,396       15,432,029  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans, net of unearned

   $ 8,091,186     $ 1,115,879     $ 5,590,180     $ 793,282     $ 299,143     $ 15,889,670  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Table of Contents

Note 3 – Loans (Continued)

 

Impaired Loans

The following tables provide information at March 31, 2013 and 2012, 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, LOCOM has been excluded.

 

      March 31, 2013  

(Dollars in thousands)

   Recorded
Investment
     Unpaid
Principal
Balance
     Related
Allowance
     Average
Recorded
Investment
     Interest
Income
Recognized
 

Impaired loans with no related allowance recorded:

              

Commercial:

              

General C&I

   $ 60,849      $ 73,873      $ —        $ 60,581      $ 80  

TRUPs

     10,000        10,000        —          17,000        —    

Income CRE

     28,136        40,034        —          30,968        75  

Residential CRE

     14,294        21,507        —          14,467        63  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 113,279      $ 145,414      $ —        $ 123,016      $ 218  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Retail:

              

HELOC (a)

   $ 21,058      $ 38,055      $ —        $ 20,698      $ —    

R/E installment loans (a)

     13,329        15,207        —          11,825        —    

Permanent mortgage (a)

     14,634        14,634        —          13,125        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 49,021      $ 67,896      $ —        $ 45,648      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Impaired loans with related allowance recorded:

              

Commercial:

              

General C&I

   $ 3,754      $ 3,754      $ 1,159      $ 7,027      $ —    

TRUPs

     40,200        40,200        14,304        36,950        —    

Income CRE

     1,071        1,071        156        1,075        11  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 45,025      $ 45,025      $ 15,619      $ 45,052      $ 11  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Retail:

              

HELOC

   $ 63,066      $ 63,066      $ 16,559      $ 61,358      $ 426  

R/E installment loans

     68,474        68,474        24,219        69,082        285  

Permanent mortgage

     121,796        121,796        22,239        122,744        683  

Credit card & other

     747        747        231        782        8  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 254,083      $ 254,083      $ 63,248      $ 253,966      $ 1,402  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial

   $ 158,304      $ 190,439      $ 15,619      $ 168,068      $ 229  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total retail

   $ 303,104      $ 321,979      $ 63,248      $ 299,614      $ 1,402  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total impaired loans

   $ 461,408      $ 512,418      $ 78,867      $ 467,682      $ 1,631  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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

 

14


Table of Contents

Note 3 – Loans (Continued)

 

      March 31, 2012  

(Dollars in thousands)

   Recorded
Investment
     Unpaid
Principal
Balance
     Related
Allowance
     Average
Recorded
Investment
     Interest
Income
Recognized
 

Impaired loans with no related allowance recorded:

              

Commercial:

              

General C&I

   $ 63,595      $ 80,563      $ —        $ 69,288      $ 203  

TRUPs

     47,000        47,000        —          47,000        —    

Income CRE

     64,190        111,789        —          65,921        77  

Residential CRE

     24,210        41,518        —          24,250        72  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 198,995      $ 280,870      $ —        $ 206,459      $ 352  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Impaired loans with related allowance recorded:

              

Commercial:

              

General C&I

   $ 12,831      $ 12,993      $ 5,322      $ 13,637      $ 34  

TRUPs

     33,700        33,700        23,825        33,700        —    

Income CRE

     2,208        2,208        446        2,215        15  

Residential CRE

     19,515        19,515        7,530        20,334        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 68,254      $ 68,416      $ 37,123      $ 69,886      $ 49  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Retail:

              

HELOC

   $ 52,411      $ 52,411      $ 14,165      $ 51,165      $ 373  

R/E installment loans

     65,145        65,145        18,135        63,728        265  

Permanent mortgage

     102,033        102,033        16,722        91,496        656  

Credit card & other

     1,028        1,028        241        1,073        11  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 220,617      $ 220,617      $ 49,263      $ 207,462      $ 1,305  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial

   $ 267,249      $ 349,286      $ 37,123      $ 276,345      $ 401  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total retail

   $ 220,617      $ 220,617      $ 49,263      $ 207,462      $ 1,305  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total impaired loans

   $ 487,866      $ 569,903      $ 86,386      $ 483,807      $ 1,706  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

Asset Quality Indicators

As previously discussed, FHN employs a dual grade commercial risk grading methodology to assign an estimate for PD and the 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.

 

15


Table of Contents

Note 3 – Loans (Continued)

 

The following tables provide the balances of commercial loan portfolio classes with associated allowance, disaggregated by PD grade as of March 31, 2013 and 2012:

 

      March 31, 2013  

(Dollars in thousands)

   General
C&I
     Loans to
Mortgage
Companies
     TRUPS (a)      Income CRE      Residential
CRE
     Total      Percentage
of Total
    Allowance
for Loan
Losses
 

PD Grade:

                      

1

   $ 169,342      $ —        $ —        $ —        $ —        $ 169,342        2 %   $ 51  

2

     172,481        —          —          2,513        —          174,994        2       82  

3

     164,654        —          —          6,241        —          170,895        2       101  

4

     309,242        —          —          6,188        216        315,646        3       421  

5

     672,509        —          —          34,672        275        707,456        8       1,284  

6

     939,686        121,538        —          148,174        7,308        1,216,706        13       3,206  

7

     1,012,012        329,484        —          177,656        1,877        1,521,029        17       3,397  

8

     1,015,430        411,119        —          237,433        257        1,664,239        18       5,314  

9

     641,720        227,410        —          123,351        765        993,246        11       8,851  

10

     461,381        40,177        —          106,948        1,053        609,559        7       7,805  

11

     440,142        —          —          54,810        1,801        496,753        5       9,837  

12

     168,677        —          —          22,233        188        191,098        2       2,808  

13

     114,717        —          337,725        36,729        10,585        499,756        5       8,371  

14,15,16

     227,018        351        3,335        76,433        14,672        321,809        3       34,096  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Collectively evaluated for impairment

     6,509,011        1,130,079        341,060        1,033,381        38,997        9,052,528        98       85,624  

Individually evaluated for impairment

     64,603        —          46,433        29,207        14,294        154,537        2       15,619  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total commercial loans

   $ 6,573,614      $ 1,130,079      $ 387,493      $ 1,062,588      $ 53,291      $ 9,207,065        100 %   $ 101,243  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

      March 31, 2012  

(Dollars in thousands)

   General C&I      Loans to
Mortgage
Companies
     TRUPS (a)      Income CRE      Residential
CRE
     Total      Percent of
Total
    Allowance
for Loan
Losses
 

PD Grade:

                      

1

   $ 185,999      $ —        $ —        $ —        $ —        $ 185,999        2   $ 59  

2

     190,005        —          —          2,594        —          192,599        2       75  

3

     163,589        —          —          21,307        —          184,896        2       104  

4

     218,712        —          —          6,428        93        225,233        2       225  

5

     388,541        —          —          30,600        297        419,438        5       915  

6

     895,483        123,307        —          96,550        4,380        1,119,720        12       3,867  

7

     852,631        434,345        —          214,099        5,812        1,506,887        17       8,592  

8

     952,757        366,556        —          151,064        422        1,470,799        16       12,760  

9

     619,101        127,639        —          158,179        2,656        907,575        10       12,032  

10

     504,433        18,734        —          94,077        1,878        619,122        7       9,194  

11

     479,398        —          —          124,662        1,473        605,533        7       12,424  

12

     163,692        —          —          16,013        3,353        183,058        2       3,513  

13

     206,166        —          334,099        67,431        7,383        615,079        7       12,344  

14,15,16

     324,666        —          4,081        197,688        28,364        554,799        6       52,400  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Collectively evaluated for impairment

     6,145,173        1,070,581        338,180        1,180,692        56,111        8,790,737        97       128,504  

Individually evaluated for impairment

     76,426        —          74,793        66,397        43,726        261,342        3       37,123  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total commercial loans

   $ 6,221,599      $ 1,070,581      $ 412,973      $ 1,247,089      $ 99,837      $ 9,052,079        100   $ 165,627  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

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

 

(a) Balances as of March 31, 2013 and 2012, presented net of $30.9 million and $34.2 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”.

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 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.

 

16


Table of Contents

Note 3 – Loans (Continued)

 

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, 2013 and 2012:

 

HELOC    March 31, 2013      March 31, 2012  

(Dollars in thousands)

Origination Vintage

   Period End
Balance
     Average
Origination
FICO
     Average
Refreshed
FICO
     Period End
Balance
     Average
Origination
FICO
     Average
Refreshed
FICO
 

pre-2003

   $ 108,054        714        705      $ 167,660        722        715  

2003

     208,233        732        723        259,437        733        724  

2004

     469,608        727        717        565,929        728        718  

2005

     592,322        734        719        704,568         734        720  

2006

     437,889        740        725        523,464        741        724  

2007

     460,916        745        728        542,266        746        731  

2008

     250,427        754        747        286,454        755        749  

2009

     134,294        752        745        170,186        754        751  

2010

     133,917        753        749        167,914        755        755  

2011

     129,303        759        756        159,368        760        757  

2012

     155,758        760        758        35,208        762        758  

2013

     27,853        756        754        —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 3,108,574        740        729      $ 3,582,454        740        729  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

R/E Installment Loans    March 31, 2013      March 31, 2012  

(Dollars in thousands)

Origination Vintage

   Period End
Balance
     Average
Origination
FICO
     Average
Refreshed
FICO
     Period End
Balance
     Average
Origination
FICO
     Average
Refreshed
FICO
 

pre-2003

   $ 33,454        685        682      $ 51,213        689        685  

2003

     101,107        719        727        147,224        722        730  

2004

     66,809        703        701        90,717        709        707  

2005

     197,153        717        711        254,045        720        713  

2006

     209,755        718        703        277,821        720        704  

2007

     299,659        726        711        389,145        729        712  

2008

     104,651        725        716        143,844        733        724  

2009

     53,302        746        744        84,485        750        748  

2010

     146,048        746        750        187,301        746        756  

2011

     390,546        760        761        462,341        761        758  

2012

     741,406        764        762        188,231        765        767  

2013

     137,716        761        759        —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 2,481,606        744        739      $ 2,276,367        737        729  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Permanent Mortgage    March 31, 2013      March 31, 2012  

(Dollars in thousands)

Origination Vintage

   Period End
Balance
     Average
Origination
FICO
     Average
Refreshed
FICO
     Period End
Balance
     Average
Origination
FICO
     Average
Refreshed
FICO
 

pre-2004 (a)

   $ 249,523        726        727      $ 146,858        724        732  

2004

     28,662        714        691        49,152        719        688  

2005

     47,382        739        713        58,748        740        715  

2006

     89,179        732        712        104,922        735        708  

2007

     260,136        734        711        288,517        734        704  

2008

     118,400        742        712        140,503        742        713  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 793,282        731        711      $ 788,700        734        711  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) Increase in 2013 balance within the pre-2004 vintages reflect the impact of clean-up calls exercised by FHN during first quarter 2013 and third quarter 2012.

 

17


Table of Contents

Note 3 – Loans (Continued)

 

The following table reflects accruing delinquency amounts for the credit card and other portfolio classes as of March 31:

 

      Credit Card      Other  

(Dollars in thousands)

   2013      2012      2013      2012  

Accruing delinquent balances:

           

30-89 days past due

   $ 1,430      $ 1,368      $ 723      $ 533  

90+ days past due

     1,483        1,456        90        65  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 2,913      $ 2,824      $ 813      $ 598  
  

 

 

    

 

 

    

 

 

    

 

 

 

Nonaccrual and Past Due Loans

For all portfolio segments and classes, loans are place on nonaccrual status if it becomes evident that full collection of principal and interest is at risk, impairment has been recognized as a partial charge-off of principal balance, or on a case-by-case basis if FHN continues to receive payments, but there are atypical loan structures or other borrower-specific issues. FHN does have a meaningful portion of loans that are classified as nonaccrual but where loan payments are received including residential real estate loans where the borrower has been discharged of personal obligation through bankruptcy and current second liens behind FHN-serviced first liens with performance issues. 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 at the time of modification and is determined to be a TDR, except for residential real estate secured loans discharged in bankruptcy (“discharged bankruptcies”) that are placed on nonaccrual, regardless of delinquency status. Generally, current second liens are placed on nonaccrual status if they are behind first liens that FHN owns or services if the first lien is 90 days or more delinquent.

The following table reflects accruing and non-accruing loans by class on March 31, 2013:

 

      Accruing      Non-Accruing         

(Dollars in thousands)

   Current      30-89
Days
Past Due
     90 +
Days
Past Due
     Total
Accruing
     Current      30-89
Days
Past Due
     90 + Days
Past Due
     Total Non-
Accruing
     Total Loans  

Commercial (C&I):

                          

General C&I

   $ 6,493,628      $ 13,177      $ 428      $ 6,507,233      $ 22,439      $ 9,694      $ 34,248      $ 66,381      $ 6,573,614  

Loans to mortgage companies

     1,129,728        —          —          1,129,728        —          —          351        351        1,130,079  

TRUPs (a)

     341,060        —          —          341,060        —          —          46,433        46,433        387,493  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial C&I

     7,964,416        13,177        428        7,978,021        22,439        9,694        81,032        113,165        8,091,186  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial real estate:

                          

Income CRE

     1,031,037        4,679        —          1,035,716        5,643        1,705        19,524        26,872        1,062,588  

Residential CRE

     41,576        —          —          41,576        1,383        —          10,332        11,715        53,291  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     1,072,613        4,679        —          1,077,292        7,026        1,705        29,856        38,587        1,115,879  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consumer real estate:

                          

HELOC

     3,022,483        28,914        18,135        3,069,532        28,072        1,390        9,580        39,042        3,108,574  

R/E installment loans

     2,432,315        11,977        8,456        2,452,748        19,692        2,685        6,481        28,858        2,481,606  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total consumer real estate

     5,454,798        40,891        26,591        5,522,280        47,764        4,075        16,061        67,900        5,590,180  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permanent mortgage

     741,500        6,025        11,126        758,651        12,866        1,266        20,499        34,631        793,282  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Credit card & other

                          

Credit card

     178,310        1,430        1,483        181,223        —          —          —          —          181,223  

Other

     115,390        723        90        116,203        1,717        —          —          1,717        117,920  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total credit card & other

     293,700        2,153        1,573        297,426        1,717        —          —          1,717        299,143  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total loans, net of unearned

   $ 15,527,027      $ 66,925      $ 39,718      $ 15,633,670      $ 91,812      $ 16,740      $ 147,448      $ 256,000      $ 15,889,670  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) Total TRUPs includes LOCOM valuation allowance of $30.9 million.

 

18


Table of Contents

Note 3 – Loans (Continued)

 

The following table reflects accruing and non-accruing loans by class on March 31, 2012:

 

      Accruing      Non-Accruing         

(Dollars in thousands)

   Current      30-89 Days
Past Due
     90 + Days
Past Due
     Total
Accruing
     Current      30-89 Days
Past Due
     90 + Days
Past Due
     Total Non-
Accruing
     Total Loans  

Commercial (C&I):

                          

General C&I

   $ 6,112,259      $ 29,520      $ 540      $ 6,142,319      $ 35,470      $ 13,202      $ 30,608      $ 79,280      $ 6,221,599  

Loans to mortgage companies

     1,070,581        —          —          1,070,581        —          —          —          —          1,070,581  

TRUPs (a)

     338,180        —          —          338,180        —          —          74,793        74,793        412,973  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial C&I

     7,521,020        29,520        540        7,551,080        35,470        13,202        105,401        154,073        7,705,153  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial real estate:

                          

Income CRE

     1,168,182        9,160        —          1,177,342        23,289        2,701        43,757        69,747        1,247,089  

Residential CRE

     55,081        1,057        —          56,138        22,958        2,713        18,028        43,699        99,837  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     1,223,263        10,217        —          1,233,480        46,247        5,414        61,785        113,446        1,346,926  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consumer real estate:

                          

HELOC

     3,496,858        37,832        20,749        3,555,439        12,713        2,937        11,365        27,015        3,582,454  

R/E installment loans

     2,227,639        21,114        9,628        2,258,381        10,185        1,472        6,329        17,986        2,276,367  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total consumer real estate

     5,724,497        58,946        30,377        5,813,820        22,898        4,409        17,694        45,001        5,858,821  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permanent mortgage

     734,659        8,454        8,900        752,013        14,566        1,101        21,020        36,687        788,700  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Credit card & other

                          

Credit card

     179,744        1,368        1,456        182,568        —          —          —          —          182,568  

Other

     86,425        533        65        87,023        4        —          2,135        2,139        89,162  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total credit card & other

     266,169        1,901        1,521        269,591        4        —          2,135        2,139        271,730  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total loans, net of unearned

   $ 15,469,608      $ 109,038      $ 41,338      $ 15,619,984      $ 119,185      $ 24,126      $ 208,035      $ 351,346      $ 15,971,330  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) Total TRUPs includes LOCOM valuation allowance of $34.2 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 reductions of interest rates, extension of the maturity date at a rate lower than current market rate for a new loan with similar risk, reduction 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 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 in exchange for payment, 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 Programs (“HAMP”). Within the HELOC, R/E installment loans, and permanent mortgage 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. 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.

 

19


Table of Contents

Note 3 – Loans (Continued)

 

In 2012, the OCC clarified that the discharge of personal liability through bankruptcy proceedings should be considered a concession. As a result, FHN classified all non-reaffirmed residential real estate loans after bankruptcy as nonaccruing TDRs in third quarter 2012.

On March 31, 2013 and 2012, FHN had $368.8 million and $303.3 million portfolio loans classified as TDRs, respectively. For TDRs in the loan portfolio, FHN had loan loss reserves of $64.6 million and $49.9 million, or 18 percent and 16 percent of TDR balances, as of March 31, 2013 and 2012, respectively. Additionally, FHN had restructured $182.1 million and $126.3 million of loans-held-for-sale as of March 31, 2013 and 2012, respectively. Loans held for sale are presented at UPB before fair value adjustments and do not carry reserves.

The following tables reflect portfolio loans that were classified as TDRs during the three months ended March 31, 2013 and 2012:

 

      2013      2012  

(Dollars in thousands)

       Number          Pre-Modification
Outstanding
Recorded Investment
     Post-Modification
Outstanding
Recorded Investment
         Number          Pre-Modification
Outstanding
Recorded Investment
     Post-Modification
Outstanding
Recorded Investment
 

Commercial (C&I):

                 

General C&I

     5      $ 1,242      $ 1,238        4      $ 583      $ 576  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial (C&I)

     5        1,242        1,238        4        583        576  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commercial real estate:

                 

Income CRE

     —          —          —          3        7,961        7,829  

Residential CRE

     —          —          —          1        50        50  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total commercial real estate

     —          —          —          4        8,011        7,879  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consumer real estate:

                 

HELOC

     115        7,759        7,551        34        4,081        4,073  

R/E installment loans

     179        6,285        6,233        59        7,543        7,611  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total consumer real estate

     294        14,044        13,784        93        11,624        11,684  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permanent mortgage

     12        4,737        4,852        38        29,893        30,064  

Credit card & other

     11        62        59        22        91        87  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total troubled debt restructurings

     322      $ 20,085      $ 19,933        161      $ 50,202      $