First Horizon National : 2018 Stress Testing Results

First Horizon National Corporation

2018 Stress Testing Results

August 6, 2018

2018 stress testing results confirm capital strength

•  On May 24th the Economic Growth, Regulatory Relief, and Consumer Protection Act was signed into law and eliminated Dodd-Frank Act ("DFA") stress testing requirements for FHN. Stress test was conducted using DFA scenarios and requirements previously in effect1.

First Horizon National Corporation (FHNC)

Total Capital

FHNC CET1  90bps

Tier 1 Capital

CET1

Peer*CET1  420bps

Basel III Adequately Capitalized

FHNC 4Q17 Actual

FHNC 9 Quarter Minimum

Peer 4Q17 ActualPeer

9 Quarter MinimumExcess Total Capital

$1,034mm

$922mm

First Tennessee Bank National Association (FTBNA)

FTBNA CET1  80bps

Total CapitalTier 1 CapitalCET1

Results Overview

•  Ability to manage capital at FHNC & FTBNA through severely adverse conditions, maintain min 8.0% CET1

•  Binding constraint is $803mm FTBNA excess Total Cap

•  Assumes maintenance of $0.12/share common dividend to FHNC shareholders2

•  Business model results in minimal trading losses and no counterparty losses vs. peers at 23% of PPNR

Drivers of Stressed Change in FTBNA Total Capital

10.7%

10.6%

10.6%

​

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FTBNA 4Q17 Actual

FTBNA 9 Quarter MinimumBasel III Adequately CapitalizedExcess Total Capital

$898mm

$803mm

4Q17

ProvisionPPNRAssets Dividends Other3

4Q19

1The Company is developing a framework to continue stress testing activities outside of the DFAST requirements

2Assumes flat share count and maintenance of dividend payments on preferred stock 3Includes regulatory disallowances and taxes

*Results represent DFA Severely Adverse scenario. All references to peer stress testing data indicates aggregate HoldCo level 2018 supervisory Dodd-Frank Act Stress Testing ("DFAST") results of 35 participating firms. Source: Federal Reserve

FHN has ability to manage through severely adverse economic conditions

DFA 2018 Severely Adverse Scenario Highlights

•  Severe global recession accompanied by a global aversion to long-term fixed-income assets

  •  Real GDP down 7.5%

  •  Unemployment up to 10.0%

  •  3-month Treasury near zero

•  Asset prices drop sharply

  •  House prices down 30%

  •  CRE prices down 40%

  •  Equity prices fall 65%, surge in market volatility

FHNC Earnings

($ in millions)

Pre-provision net revenue Provision for loan and lease losses Realized gains/(losses) on securities All other gains/(losses)1

Net income before tax Taxes

Net income to controlling interest

•  FTN's fixed income trading business benefits from surge in market volatility

FHNC stressed loan loss rates less than peers for most portfolios and in aggregate

First-lien mortgages

Junior liens & HELOCs

Consumer

Total losses

Other loans

CRE

C&I

-

	FHNC 9 quarter cumulative losses of $755mm,
		FHNC stressed loan loss rates
excess capital to cover additional 9 quarters of losses
	*
	From 4Q07 to 4Q09 FHNC's loss rate was 6.5%
	Significant changes since 2009:

•  Balance sheet mix shift, including exit of national mortgage lending business

•  Revised underwriting standards

•  Enhanced loss mitigation strategies

5.0%

10.0%

15.0%

1Payment of dividends on FTBNA preferred and REIT preferred stock

*Results represent DFA Severely Adverse scenario. All references to peer stress testing data indicates aggregate HoldCo level 2018 supervisory Dodd-Frank Act Stress Testing ("DFAST") results of 35 participating firms. Source: Federal Reserve