July 14, 1997

First Tennessee Reports Record Second Quarter Earnings

MEMPHIS, Tenn.--July 14, 1997--First Tennessee National Corporation (First Tennessee) (NASDAQ/NMS:FTEN) reported second quarter earnings per share of $.72, an increase of 14 percent over last year's second quarter earnings per share of $.63.

Net income for the quarter was $46.4 million, up 9 percent from the previous year. For the second quarter of 1997, return on average assets was 1.43 percent and return on average common equity was 21.81 percent, compared with 1.34 percent and 19.48 percent, respectively, for the same period in 1996. Total assets were $13.7 billion and shareholders' equity was $880.9 million at June 30, 1997.

For the first six months of 1997, net income totaled $84.9 million, or $1.32 per share compared with $79.8 million, or $1.19 per share, for the same period in 1996. Return on average assets for the first half of 1997 was 1.33 percent and return on average common equity was 19.95 percent, compared with 1.28 percent and 18.37 percent, respectively, in 1996.

"This quarter was highlighted with a return on common equity in excess of 21 percent and 14 percent earnings per share growth," said Ralph Horn, chairman and chief executive officer of First Tennessee. "Our strategy to grow our fee-based businesses continues to be successful, with all of these businesses showing favorable revenue trends during the quarter, in addition to continued improvement in our net interest margin and net interest income growth in the retail/commercial bank."

Noninterest income

Fee income (noninterest income excluding securities gains and losses) grew 19 percent from the second quarter of 1996 and contributed approximately 56 percent to total revenue. For the first six months of 1997, noninterest income increased 10 percent over the same period in 1996.

Fee income in mortgage banking grew 17 percent from the second quarter of 1996 to $71.1 million. Growth in the servicing portfolio was the primary contributing factor as the servicing portfolio grew from $20.5 billion at June 30, 1996, to $23.9 billion at June 30, 1997. Mortgage loan originations declined 14 percent from $2.8 billion in the second quarter of 1996 to $2.4 billion in the second quarter of 1997. For the first six months of 1997, noninterest income in mortgage banking was $135.3 million, a 14 percent increase over the same period in 1996.

First Tennessee Capital Markets experienced a 17 percent increase in fee income from the second quarter of 1996 to $20.0 million. Fee income for the first six months of 1997 was $40.5 million, an 11 percent decline from the same period in 1996. A record level of fee income was earned during the first quarter of 1996 related to stronger customer demand from the benefit of regulatory reclassifications of securities.

Merchant processing fee income increased 60 percent to $8.2 million, and cardholder fees grew 12 percent from the second quarter of 1996 to $4.9 million. Deposit transactions and cash management noninterest income increased 9 percent from the second quarter of 1996 to $21.6 million, and over this same time period noninterest income from trust and investment management services increased 12 percent to $9.5 million. For the first six months of 1997, fee income in merchant processing was $14.9 million, an increase of 37 percent; cardholder fees were $9.4 million, an increase of 13 percent; fees from deposit transactions and cash management were $40.8 million, an increase of 9 percent; and trust and investment management service fees were $18.8 million, an increase of 12 percent.

Net interest income

Net interest income increased 5 percent from the second quarter of 1996, with a 1 percent increase in average earning assets and a 17 basis point improvement in net interest margin from 4.09 percent to 4.26 percent. The net interest margin in the regional banking group improved from 4.49 percent in the second quarter of 1996 to 4.66 percent in the second quarter of 1997. The expiration of the amortization of a terminated basis swap contributed 9 basis point to the improvement.

For the first six months of 1997, net interest income increased 7 percent over the same period last year, with a year-to-date margin of 4.25 percent.

Noninterest expense

Total noninterest expense (operating expense) increased 11 percent from the second quarter of 1996. Employee compensation, incentives and benefits (personnel expense) increased 4 percent. As a result of a larger servicing portfolio, amortization expense of mortgage servicing rights increased $4.5 million (108 percent) from the second quarter of 1996. Most of the other growth relates to expenses associated with the qualifying capital securities offering, equipment rental and depreciation.

For the first six months of 1997, noninterest expense increased 7 percent over the same period last year and personnel expense decreased 1 percent.

Balance sheet

Total average assets grew 2 percent from the second quarter of 1996, with overall loan growth of 7 percent. Commercial loans grew 9 percent and consumer loans grew 6 percent from the second quarter of 1996. Interest-bearing core deposits increased 5 percent from the previous year and were the primary funding source for this loan growth. The mortgage warehouse declined 32 percent from the second quarter of 1996 due to the lower levels of refinancing in the industry this year versus last year.

Asset quality

The provision for loan losses increased $4.9 million from the second quarter of 1996 but was flat to first quarter 1997 levels. The allowance for loan losses to total loans remained relatively flat from the second quarter of 1996 at 1.54 percent for the second quarter of 1997 compared to 1.56 percent for the second quarter of 1996. The ratio of nonperforming assets to total loans was .66 percent for the second quarter, an increase from the second quarter 1996 level of .32 percent but a decline from the first quarter 1997 level of .74 percent. The increase in nonperforming assets from the second quarter of 1996 came primarily from the increase in the number of mortgage loans repurchased during the first quarter of 1997 to correct loan file documentation in order to certify loan pools.

Mortgage banking nonperforming loans decreased $4.3 million between the first and second quarters of 1997. The ratio of net charge-offs to average loans increased from .31 percent in the second quarter of 1996 to .54 percent in the second quarter of 1997, reflecting increases in charge-offs in consumer and credit card lending, and less recoveries in commercial loans. Although the percentage of charge-offs increased in credit card lending, it still remained favorable to industry averages.

General

First Tennessee, headquartered in Memphis, Tenn., is a nationwide, diversified financial services institution and is one of the 50 largest bank holding companies in the United States in market capitalization. First Tennessee's market capitalization was $3.1 billion at June 30, 1997. Banking and other financial services are provided through the regional banking group and three national lines of business: FT Mortgage Companies, First Tennessee Capital Markets and transaction processing. Transaction processing includes credit card merchant processing MONEY BELT(SM) (our automated teller machine network), First Express (our nationwide check clearing operation), and transaction-oriented cash management products. The corporation's common stock is traded over the counter on the Nasdaq Stock Market's national market system under the symbol FTEN. It is listed in the financial section of most newspapers as FstTN Ntl and is included in the Standard & Poor's MidCap 400 index.


                 FIRST TENNESSEE NATIONAL CORPORATION
                STATEMENTS OF INCOME - QUARTERLY GROWTH
                              (Unaudited)

                                       Quarter Ended           Growth
                                          June 30             Rate (%)
                                 ------------------------
                                      1997        1996
                                 -----------  -----------
Per Share Data:
        Earnings per share             $ .72        $ .63     14.29+
        Dividends declared             $ .30       $ .265

Selected Financial Ratios:
--------------------------
        Return on average assets       1.43%        1.34%
        Return on capital(a)          19.52%       19.48%
        Return on average common
               equity                 21.81%       19.48%

                                       Quarter Ended           Growth
                                          June 30             Rate (%)
                                 ------------------------
                                      1997        1996
                                 -----------  -----------
Summary Statements
of Income (thousands)
---------------------
Interest income                  $   230,912  $   225,974      2.19+
Less interest expense                111,894      113,020      1.00--
                                 -----------  -----------
        Net interest income          119,018      112,954      5.37+

Provision for loan losses             12,504        7,559     65.42+
                                 -----------  -----------
        Net interest income after
           provision for loan
                 losses              106,514      105,395      1.06+

Noninterest income:
        Mortgage banking              71,100       60,902     16.74+
        Capital markets               19,990       17,145     16.59+
        Deposit transactions and
                 cash management      21,558       19,860      8.55+
        Merchant processing            8,164        5,116     59.58+
        Cardholder fees                4,893        4,362     12.17+
        Trust and investment
                 management            9,498        8,458     12.30+
        Securities gains/(losses)       (789)          52        NA
        Other income and
                 commissions          18,763       13,825     35.72+
                                 -----------  -----------
         Total noninterest income    153,177      129,720     18.08+
                                 -----------  -----------
           Adjusted gross income
              after provision for
              loan losses            259,691      235,115     10.45+

Noninterest expense:
        Employee compensation,
               incentives, and
                 benefits             96,764      93,062      3.98+
        Occupancy, equipment
               rentals, depreciation,
               and maintenance        21,239      18,345     15.78+
        Amortization of mortgage
               servicing rights        8,656       4,166    107.78+
        Amortization of intangible
               assets                  2,403       2,362      1.74+
        Deposit insurance premium        370         464     20.26--
        Other                         56,626      49,598     14.17+
                                 -----------  ----------
         Total noninterest expense   186,058     167,997     10.75+
                                 -----------  ----------
                Income before income
                  taxes               73,633      67,118      9.71+
        Applicable income taxes       27,269      24,771     10.08+
                                 -----------  ----------
           Net income            $    46,364  $   42,347      9.49+
                                 ===========  ==========

       Net interest income - FTE $   120,117  $  114,377      5.02+

(a) Net income/Total shareholders' equity plus Guaranteed preferred
beneficial interests in First Tennessee's subordinated debentures.


                 FIRST TENNESSEE NATIONAL CORPORATION
                 STATEMENTS OF INCOME - YEARLY GROWTH
                             (Unaudited)

                                          Year-to-date       Growth
                                             June 30         Rate (%)
                                        -----------------    --------
                                        1997         1996
                                     ---------    ---------
Per Share Data:
       Earnings per share            $    1.32    $    1.19    10.92+
       Dividends declared            $     .60    $     .53

Selected Financial Ratios:
        Return on average assets          1.33%        1.28%
        Return on capital(b)             17.92%       18.37%
        Return on average common
         equity                          19.95%       18.37%


                                           Year-to-date       Growth
                                              June 30         Rate (%)
                                        -----------------     --------
Summary Statements                      1997         1996
  of Income                          ---------    ---------
 (thousands)

Interest income                      $ 453,238    $ 443,626     2.17+
Less interest expense                  218,711      225,294     2.92-
                                     ---------    ---------
        Net interest income            234,527      218,332     7.42+


Provision for loan losses               25,030       15,592    60.53+
        Net interest income after    ---------    ---------
           provision for loan losses   209,497      202,740     3.33+
Noninterest income:
        Mortgage banking               135,287      119,021    13.67+
        Capital markets                 40,455       45,266    10.63-
        Deposit transactions and
               cash management          40,782       37,295     9.35+
        Merchant processing             14,913       10,883    37.03+
        Cardholder fees                  9,417        8,355    12.71+
        Trust and investment managment  18,768       16,754    12.02+
        Securities gains/(losses)         (760)         310       NA
        Other income and commissions    33,391       28,413    17.52+
                                     ---------    ---------
           Total noninterest income    292,253      266,297     9.75+
                                     ---------    ---------
                Adjusted gross income
                 after provision for
                 loan losses           501,750      469,037     6.97+

Noninterest expense:
        Employee compensation,
              incentives, and
              benefits                 190,660      192,004      .70-
        Occupancy, equipment rentals,
              depreciation, and
              maintenance               41,060       35,795    14.71+
        Amortization of mortgage
              servicing rights          17,491       11,865    47.42+
        Amortization of intangible
              assets                     4,810        4,716     1.99+
        Deposit insurance premium          735          883    16.76-
        Other                          111,628       98,320    13.54+
                                     ---------    ---------
           Total noninterest expense   366,384      343,583     6.64+
                                     ---------    ---------
              Income before income
               taxes                   135,366      125,454     7.90+
        Applicable income taxes         50,439       45,666    10.45+
                                     ---------    ---------
           Net income                $  84,927    $  79,788     6.44+
                                     =========    =========
        Net interest income - FTE    $ 236,763    $ 221,189     7.04+

(b) Net income/Total shareholders' equity plus Guaranteed preferred
    beneficial interests in First Tennessee's subordinated debentures.

                FIRST TENNESSEE NATIONAL CORPORATION
                   STATEMENTS OF INCOME - QUARTERLY
                             (Unaudited)

                        2Q97       1Q97     4Q96     3Q96       2Q96
                      --------- ---------- ------- --------  ---------
Per Share Data:
Earnings per share        $ .72     $ .60    $.80      $ .69     $ .63
Dividends declared       $ .300    $ .300   $.300     $ .265    $ .265

Selected Financial Ratios:

Return on average assets  1.43%     1.23%    1.67%     1.47%     1.34%
Return on capital(c)     19.52%    16.31%   22.47%    20.71%    19.48%
Return on average common
  equity                 21.81%    18.09%   22.47%    20.71%    19.48%

                        2Q97       1Q97     4Q96      3Q96      2Q96
                      --------- --------- -------- --------- ---------
Summary Statements
of Income (thousands)

Interest income       $ 230,912 $ 222,326 $227,094 $ 225,777 $ 225,974
Less interest expense   111,894   106,817  109,287   110,728   113,020
                      --------- --------- -------- --------- ---------
Net interest income     119,018   115,509  117,807   115,049   112,954
Provision for loan
  losses                 12,504    12,526   11,232     8,853     7,559
                      --------- --------- -------- --------- ---------
Net interest income after
  provision for loan
  losses                106,514   102,983  106,575   106,196   105,395
Noninterest income:
  Mortgage banking       71,100    64,187   83,768    71,495    60,902
  Capital markets        19,990    20,465   23,654    16,951    17,145
  Deposit transactions
    and cash management  21,558    19,224   20,792    20,141    19,860
  Merchant processing     8,164     6,749    6,666     6,636     5,116
  Cardholder fees         4,893     4,524    4,576     4,224     4,362
Trust and investment
  management              9,498     9,270    9,223     8,727     8,458
Securities gains/(losses)  (789)       29   (3,035)       44        52
Other income and
  commissions            18,763    14,628   16,789    14,201    13,825
                     ---------- --------- -------- --------- ---------
Total noninterest
  income                153,177   139,076  162,433   142,419   129,720
                     ---------- --------- -------- --------- ---------

Adjusted gross income
  after provision for
    loan losses         259,691   242,059  269,008   248,615   235,115

Noninterest expense:
  Employee compensation,
    incentives, and
    benefits             96,764    93,896   99,371    94,005    93,062
  Occupancy, equipment
    rentals, depreciation,
      and maintenance    21,239    19,821   19,524    18,617    18,345
  Amortization of mortgage
    servicing rights      8,656     8,835    7,507     6,669     4,166
  Amortization of
    intangible assets     2,403     2,407    2,363     2,412     2,362
  Deposit insurance
    premium                 370       365      (13)    4,259       464
  Other                  56,626    55,002   57,239    48,950    49,598
                      --------- --------- -------- --------- ---------
  Total noninterest
    expense             186,058   180,326  185,991   174,912   167,997
                      --------- --------- -------- --------- ---------

  Income before income
    taxes                73,633    61,733   83,017    73,703    67,118
  Applicable income
    taxes                27,269    23,170   29,695    26,906    24,771
                      --------- --------- -------- --------- ---------
  Net income          $  46,364 $  38,563 $ 53,322 $  46,797 $  42,347
                      ========= ========= ======== ========= =========

  Net interest
    income - FTE      $ 120,117 $ 116,646 $119,115 $ 116,308 $ 114,377


(c) Net income/Total shareholders' equity plus Guaranteed preferred
 beneficial interests in First Tennessee's subordinated debentures.


               FIRST TENNESSEE NATIONAL CORPORATION
          AVERAGE STATEMENTS OF CONDITION - QUARTERLY GROWTH
                             (Unaudited)

                                       Quarter Ended           Growth
                                          June 30             Rate (%)
                                 ------------------------
Average Balance
Sheet (thousands)                    1997         1996
-----------------                -----------  -----------
Loans, net of unearned income:
        Commercial              $  3,633,626 $  3,335,006      8.95+
        Consumer                   2,730,127    2,584,850      5.62+
        Permanent mortgage           627,076      663,753      5.53-
       Credit card receivables      540,559      523,043      3.35+
        Real estate construction     313,930      264,615     18.64+
        Nonaccrual - Regional
           Banking Group              11,989        8,628     38.95+
        Nonaccrual - Mortgage
           Banking                    32,113        4,632    593.29+
                                ------------ ------------
           Total loans, net of
               unearned income     7,889,420    7,384,527      6.84+
Investment securities              2,162,429    2,213,470      2.31--
Mortgage loans held for sale         827,256    1,212,254     31.76--
Other earning assets                 417,286      399,737      4.39+
                                ------------ ------------
           Total earning assets   11,296,391   11,209,988       .77+
Cash and due from banks              639,862      663,744      3.60--
Other assets                       1,063,850      833,058     27.70+
                                ------------ ------------
           Total assets         $ 13,000,103 $ 12,706,790      2.31+
                                ============ ============
Certificates of deposits under
         $100,000 and other
                   time         $  2,808,247 $  2,884,512      2.64--
Other interest-bearing deposits    3,792,187    3,414,895     11.05+
                                ------------ ------------
           Total interest-bearing
                   core deposits   6,600,434    6,299,407      4.78+
Certificates of deposits $100,000
         and more                    950,751      929,749      2.26+
Short-term borrowed funds          2,225,148    2,159,860      3.02+
Term borrowings                      182,785      257,768     29.09--
                                ------------ ------------
           Total interest-bearing
                   liabilities     9,959,118    9,646,784      3.24+
Demand deposits                    1,662,041    1,812,756      8.31--
Other liabilities                    426,195      372,823     14.32+
Qualifying capital securities(d)     100,000          -         N/A
Shareholders' equity                 852,749      874,427      2.48--
                                ------------ ------------
           Total liabilities and
            shareholders'
               equity           $ 13,000,103 $ 12,706,790      2.31+
                                ============ ============

(d) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures



                    FIRST TENNESSEE NATIONAL CORPORATION
               AVERAGE STATEMENTS OF CONDITION - YEARLY GROWTH
                              (Unaudited)

                                           Year-to-date       Growth
                                             June 30          Rate (%)
                                     ----------------------- -------
Average Balance
Sheet (thousands)                        1997        1996
                                     -----------  -----------
Loans, net of unearned income:
        Commercial                   $ 3,581,817  $ 3,329,007   7.59 +
        Consumer                       2,715,073    2,564,287   5.88 +
        Permanent mortgage               628,683      672,748   6.55 --
Credit card receivables                  542,631      519,955   4.36 +
        Real estate construction         306,628      255,480  20.02 +
        Nonaccrual - Regional
           Banking Group                  11,538        9,382  22.98 +
        Nonaccrual - Mortgage
           Banking                        30,328        5,013 504.99 +
                                     -----------  -----------
          Total loans, net of
           unearned income             7,816,698    7,355,872   6.26 +
Investment securities                  2,182,505    2,172,016    .48 +
Mortgage loans held for sale             798,170    1,138,075  29.87 --
Other earning assets                     377,722      371,505   1.67 +
                                     -----------  -----------
           Total earning assets       11,175,095   11,037,468   1.25 +
Cash and due from banks                  668,622      665,131    .52 +
Other assets                           1,036,766      807,266  28.43 +
                                    ------------ ------------
           Total assets             $ 12,880,483 $ 12,509,865   2.96 +
                                    ============ ============

Certificates of deposits under
        $100,000 and other time      $ 2,834,570  $ 2,872,090   1.31 --
Other interest-bearing deposits        3,685,189    3,348,165  10.07 +
                                     -----------  -----------
           Total interest-bearing
            core deposits              6,519,759    6,220,255   4.81 +
Certificates of deposits $100,000
        and more                         863,718      823,364   4.90 +
Short-term borrowed funds              2,160,820    2,120,818   1.89 +
Term borrowings                          195,972      258,454  24.18 --
                                     -----------  -----------
           Total interest-bearing
             liabilities               9,740,269    9,422,891   3.37 +
Demand deposits                        1,758,797    1,833,614   4.08 --
Other liabilities                        425,607      380,140  11.96 +
Qualifying capital securities(e)          97,238          -      N/A
Shareholders' equity                     858,572      873,220   1.68 --
                                     -----------  -----------
           Total liabilities and
             shareholders' equity   $ 12,880,483 $ 12,509,865   2.96 +
                                    ============ ============

(e) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures


                FIRST TENNESSEE NATIONAL CORPORATION
              AVERAGE STATEMENTS OF CONDITION - QUARTERLY
                             (Unaudited)

                2Q97         1Q97       4Q96       3Q96         2Q96
            ------------ ----------- ----------- ---------- -----------
Average Balance
Sheet (thousands)

Loans, net of unearned income:

 Commercial $ 3,633,626 $ 3,529,430 $ 3,482,527 $ 3,392,149 $ 3,335,006
 Consumer     2,730,127   2,699,853   2,669,872   2,630,614   2,584,850
 Permanent
 mortgage       627,076     630,309     642,094     652,710     663,753
 Credit
  card
  receivables   540,559     544,726     542,211     538,510     523,043
 Real estate
  construction  313,930     299,246     300,322     288,855     264,615
 Nonaccrual -
  Regional
  Banking Group  11,989      11,082      11,976       9,570       8,628
 Nonaccrual -
  Mortgage
  Banking        32,113      28,523       7,058       5,640       4,632
             ----------  ----------  ----------  ----------  ----------
 Total loans,
  net of
  unearned
  income      7,889,420   7,743,169   7,656,060   7,518,048   7,384,527
Investment
 securities   2,162,429   2,202,804   2,268,953   2,199,210   2,213,470
Mortgage loans
 held for sale  827,256     768,760     874,172   1,089,101   1,212,254
Other earning
 assets         417,286     337,719     273,159     293,791     399,737
             ----------  ----------  ----------  ----------  ----------
 Total
  earning
  assets     11,296,391  11,052,452  11,072,344  11,100,150  11,209,988
Cash and due
 from banks     639,862     697,702     675,272     645,781     663,744
Other assets  1,063,850   1,009,381     958,353     879,721     833,058
             ----------  ----------  ----------  ----------  ----------
 Total
  assets    $13,000,103 $12,759,535 $12,705,969 $12,625,652 $12,706,790
             ==========  ==========  ==========  ==========  ==========

Certificates
 of deposits
 under
 $100,000
 and other
 time       $ 2,808,247 $ 2,861,187 $ 2,891,124 $ 2,905,366 $ 2,884,512
Other
 interest-
 bearing
 deposits     3,792,187   3,577,002   3,489,933   3,446,259   3,414,895
             ----------  ----------  ----------  ----------  ----------
  Total
   interest-
   bearing
   core
   deposits   6,600,434   6,438,189   6,381,057   6,351,625   6,299,407
Certificates
 of deposits
 $100,000
 and more       950,751     775,718     834,411     861,729     929,749
Short-term
 borrowed
 funds        2,225,148   2,095,777   2,050,952   2,140,398   2,159,860
Term
 borrowings     182,785     209,305     241,405     256,451     257,768
             ----------  ----------  ----------  ----------  ----------
 Total
  interest-
  bearing
  liabilities 9,959,118   9,518,989   9,507,825   9,610,203   9,646,784
Demand
 deposits     1,662,041   1,856,628   1,847,351   1,750,140   1,812,756
Other
 liabilities    426,195     425,014     406,896     366,369     372,823
Qualifying
 capital
 securities(f)  100,000      94,444           -           -           -
Shareholders'
 equity         852,749     864,460     943,897     898,940     874,427
             ----------  ----------  ----------  ----------  ----------
 Total
  liabilities
  and
  shareholders'
  equity    $13,000,103 $12,759,535 $12,705,969 $12,625,652 $12,706,790
             ==========  ==========  ==========  ==========  ==========

Average
shares
outstanding  64,005,532 64,582,657   67,117,011  67,144,391  67,224,935

(f) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures


                 FIRST TENNESSEE NATIONAL CORPORATION
                  PERIOD-END STATEMENTS OF CONDITION
                             (Unaudited)

                                         June 30               Growth
                                 ------------------------
Period-End Balance                  1997          1996        Rate (%)
Sheet (thousands)                -----------  -----------
Loans, net of unearned income:
        Commercial               $ 3,707,017  $ 3,394,050      9.22+
        Consumer                   2,751,428    2,603,152      5.70+
        Permanent mortgage           636,859      658,219      3.25--
        Credit card receivables      537,398      534,784       .49+
        Real estate construction     335,443      283,150     18.47+
        Nonaccrual - Regional
           Banking Group              11,506        9,730     18.25+
        Nonaccrual - Mortgage
           Banking                    26,821        4,606    482.31+
                                 -----------  -----------
          Total loans, net of
            unearned income        8,006,472    7,487,691      6.93+
Investment securities              2,141,036    2,248,084      4.76--
Mortgage loans held for sale         814,160    1,103,237     26.20--
Other earning assets                 641,483      302,720    111.91+
                                ------------ ------------
       Total earning assets      11,603,151   11,141,732      4.14+
Cash and due from banks              634,748      674,458      5.89--
Other assets                       1,441,694    1,138,767     26.60+
                                ------------ ------------
           Total assets         $ 13,679,593 $ 12,954,957      5.59+
                                ============ ============

Certificates of deposits under
        $100,000 and other time $  2,778,707 $  2,900,771      4.21--
Other interest-bearing deposits    3,831,660    3,463,597     10.63+
Certificates of deposits $100,000
        and more                     826,200      748,146     10.43+
Short-term borrowed funds          2,588,339    2,117,889     22.21+
Term borrowings                      181,768      257,327     29.36--
                                ------------ ------------
           Total interest-bearing
                  liabilities     10,206,674    9,487,730      7.58+
Demand deposits                    1,617,425    1,859,864     13.04--
Other liabilities                    874,571      715,029     22.31+
Qualifying capital securities(g)     100,000          -         N/A
Shareholders' equity                 880,923      892,334      1.28--
                                ------------ ------------
           Total liabilities and
           shareholders' equity $ 13,679,593 $ 12,954,957      5.59+
                                ============ ===========

(g) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures.


                FIRST TENNESSEE NATIONAL CORPORATION
                       ASSET QUALITY HIGHLIGHTS
                             (Unaudited)
Asset Quality
-------------
                        2Q97     1Q97      4Q96      3Q96      2Q96
                    --------- -------- --------- --------- ----------
Allowance for
 Loan Losses:

 Beginning Reserve  $ 121,688 $ 117,748 $ 117,717 $ 116,478 $ 114,631
 Provision             12,504    12,526    11,232     8,853     7,559
 Charge-offs          (12,960)  (10,653)  (13,631)  (10,742)   (9,159)
 Loan recoveries        2,226     2,067     2,430     3,128     3,447
                    --------- --------- --------- --------- ---------
 Ending Balance     $ 123,458 $ 121,688 $ 117,748 $ 117,717 $ 116,478
                    ========= ========= ========= ========= =========

Nonperforming Assets:
 Nonperforming loans $ 11,506 $  11,613 $   9,978 $  12,390 $   9,730
 Foreclosed real
  estate                4,676     5,807     5,137     3,667     5,334
 Other assets             227       194       196       203       925
                    --------- --------- --------- --------- ---------
 Total Regional
  Banking Group     $  16,409 $  17,614  $ 15,311 $  16,260 $  15,989
                    ========= ========= ========= ========= =========
 Mortgage Banking
  nonperforming
  loans                26,821    31,109     8,948     6,217     4,606
 Mortgage Banking
 foreclosed real
 estate                 9,734     8,824     2,686     3,392     3,380
                    --------- --------- --------- --------- ---------
 Total nonperforming
  assets            $  52,964 $  57,547  $ 26,945 $  25,869 $  23,975
                    ========= ========= ========= ========= =========

Loans and leases
 past due 90 days
 or more            $  31,449 $  36,038  $ 30,747 $  32,424 $  32,157


                        2Q97      1Q97      4Q96      3Q96      2Q96
                    --------- ---------  -------- --------- ---------


Asset Quality Ratios - Total First Tennessee

Nonperforming loans
 to total loans
 (net of unearned
 income)                  .48%      .55%      .24%      .24%      .19%
Nonperforming assets
 to total loans
 (net of unearned
 income) plus
 foreclosed real
 estate and
 other assets             .66%      .74%      .35%      .34%      .32%
Allowance for loan
 losses to total loans   1.54%     1.57%     1.52%     1.54%     1.56%
Allowance for loan
 losses to
 nonperforming loans   322.12%   284.84%   622.15%   632.65%   812.49%
Allowance for loan
 losses to
 nonperforming assets  233.10%   211.46%   436.99%   455.05%   485.83%
Net charge-offs to
 average loans            .54%      .44%      .59%      .41%      .31%

Asset Quality Ratios - Regional Banking Group

Nonperforming loans
 to total loans
 (net of unearned
  income)                 .14%      .15%      .13%      .16%      .13%
Nonperforming assets
 to total loans
 (net of unearned
 income) plus
 foreclosed real estate
 and other assets         .21%      .23%      .20%      .21%      .21%
Allowance for loan
 losses to total loans   1.49%     1.51%     1.52%     1.53%     1.55%
Allowance for loan
 losses to
 nonperforming loans 1,035.14% 1,005.39% 1,172.18%   943.98% 1,189.31%
Allowance for loan
 losses to
 nonperforming
 assets                725.84%   662.86%   763.90%   719.31%   723.75%


                 FIRST TENNESSEE NATIONAL CORPORATION
                    CAPITAL AND MARGIN HIGHLIGHTS
                             (Unaudited)
Capital Adequacy:
                     2Q97       1Q97       4Q96      3Q96       2Q96
                 ---------- ---------- ---------- ---------- ----------
Tier 1 Capital(h) $ 891,553 $  860,643   $856,769  $ 837,091  $ 803,839
Tier 2 Capital(h)   275,886    270,841    266,864    263,594    263,537
                 ---------- ---------- ---------- ---------- ----------
 Total Capital(h)$1,167,439 $1,131,484 $1,123,633 $1,100,685 $1,067,376
                 ========== ========== ========== ========== ==========
Risk-Adjusted
 Assets(h)      $10,135,657 $9,735,710 $9,515,107 $9,158,018 $9,157,648

Tier 1 Ratio(h)        8.80%      8.84%      9.00%      9.14%      8.78%
Tier 2 Ratio(h)        2.72%      2.78%      2.81%      2.88%      2.88%
                 ---------- ---------- ---------- ---------- ----------
 Total Capital        11.52%     11.62%     11.81%     12.02%     11.66%
                 ========== ========== ========== ========== ==========
Leverage Ratio(h)      6.90%      6.79%      6.80%      6.67%      6.37%

Common Equity/Asset
  Ratio (average)      6.56%      6.78%      7.43%      7.12%      6.88%

Total Equity(i)/Assets
  Ratio (average)      7.33%      7.52%      7.43%      7.12%      6.88%

Book Value          $ 13.76    $ 13.17    $ 14.28    $ 13.78    $ 13.29

   (h) Current quarter is an estimate.
   (i) Total equity includes shareholders' equity and Guaranteed
preferred beneficial interests in First Tennessee's subordinated
debentures.

Net Interest Margin
                                 2Q97    1Q97    4Q96    3Q96    2Q96
                               ------- ------- ------- ------- -------
Yield on earning assets         8.14 %  8.06 %  8.14 %  8.06 %  8.04 %
Rates paid on interest-
   bearing liabilities          4.49 %  4.51 %  4.55 %  4.57 %  4.69 %
                               ------- ------- ------- ------- -------
Net interest spread             3.65 %  3.55 %  3.59 %  3.49 %  3.35 %
Effect of interest-free sources  .53 %   .63 %   .64 %   .61 %   .66 %
Loan fees                        .09 %   .09 %   .09 %   .09 %   .10 %
FRB interest and penalties     ( .01)% ( .03)% ( .02)% ( .01)% ( .02)%
                               ------- ------- ------- ------- -------
Net interest margin             4.26 %  4.24 %  4.30 %  4.18 %  4.09 %
                               ======= ======= ======= ======= =======


                 FIRST TENNESSEE NATIONAL CORPORATION
                  REGIONAL BANKING GROUP HIGHLIGHTS
                  (Dollars in thousands, Unaudited)

                      2Q97      1Q97       4Q96       3Q96       2Q96
                    -------   --------   --------   --------   --------
REGIONAL BANKING GROUP

Total Revenues      153,051   $146,279   $148,933   $141,614   $138,748
Loan Loss Provision  12,397      8,430     10,919      8,853      7,559
Operating Expenses   86,082     86,218     84,946     81,008     79,234
                    -------   --------   --------   --------   --------
 Pre-Tax Income     $54,572    $51,631    $53,068    $51,753    $51,955

  Retail/Commercial Bank

  Total Revenues   $128,222   $121,737   $124,896   $118,014   $115,596
  Loan Loss Provision 5,781      1,963      4,583      3,234      2,039
  Operating Expenses 73,675     73,783     73,242     69,793     67,564
                    -------   --------   --------   --------   --------
     Pre-Tax Income $48,766    $45,991    $47,071    $44,987    $45,993

  Credit Card

  Total Revenues    $15,235    $15,170    $14,715    $14,769    $14,546
  Loan Loss Provision 6,616      6,467      6,336      5,619      5,520
  Operating Expenses  5,853      5,811      5,127      4,746      5,317
                    -------   --------   --------   --------   --------
    Pre-Tax Income   $2,766     $2,892     $3,252     $4,404     $3,709

  Key Statistics:
  Outstandings     $537,398   $529,197   $564,802   $537,034   $534,784
  Annualized Net
   Charge-offs /
   Average Loans       5.15%      4.59%      4.46%      3.94%      3.98%

  Trust Services

  Total Revenues     $9,594     $9,372     $9,322     $8,831     $8,606
  Operating Expenses  6,554      6,624      6,577      6,469      6,353
                    -------   --------   --------   --------   --------
   Pre-Tax Income    $3,040     $2,748     $2,745     $2,362     $2,253

  Key Statistics:
   Managed Assets
    (FTBNA)      $6,065,780 $5,700,164 $5,657,171 $5,423,824 $5,333,677


The business line financial information excludes significant
nonrecurring items, such as security gains and losses.  Expenses have
been allocated based on management's best estimates, and equity has
been assigned to reflect the inherent risk in each individual
business line.

                     FIRST TENNESSEE NATIONAL CORPORATION
                      NATIONAL BUSINESS LINES HIGHLIGHTS
                      (Dollars in thousands, Unaudited)


                   2Q97        1Q97        4Q96        3Q96        2Q96
                ----------- ----------- ----------- ----------- ----------
MORTGAGE BANKING
Total Revenues     $79,758     $70,470     $93,443     $82,482     $70,825
Loan Loss
 Provision             107       4,096         313         --          --
Operating
 Expenses           68,107      61,869      69,745      63,004      60,987
               -----------  ----------  ----------  ----------- ----------
 Pre-Tax Income    $11,544      $4,505     $23,385     $19,478      $9,838
Key Statistics:
 Origination
  Volume        $2,389,664  $1,949,526  $2,378,802  $2,433,067  $2,771,878
 Servicing
  Portfolio    $23,924,375 $23,383,506 $22,288,031 $21,698,381 $20,491,292

CAPITAL MARKETS
Total Revenues     $21,203     $21,076     $24,717     $17,618     $18,517
Operating
 Expenses           15,526      16,084      17,352      13,739      14,514
               ----------- ----------- ----------- ----------- -----------
Pre-Tax Income      $5,677      $4,992      $7,365      $3,879      $4,003

Key Statistics:
 Total Securities
  Bought/Sold  $46,007,572 $47,258,846 $54,534,714 $43,640,882 $55,118,434
 Total
  Underwritings $4,796,000  $6,028,000  $6,723,000  $3,691,000  $6,992,000

TRANSACTION PROCESSING
Total Revenues     $19,897     $17,507     $17,492     $16,967     $15,953
Operating Expenses  14,313      14,125      13,948      13,339      13,260
               ----------- ----------- ----------- ----------- -----------
 Pre-Tax Income     $5,584      $3,382      $3,544      $3,628      $2,693

Key Statistics:
 Merchant
  Transactions
  Processed     31,007,086  26,988,136  27,899,716  29,305,213  27,882,205
 MONEY BELT
  Transactions
  Processed
 (correspondent) 5,010,301   4,472,319   4,417,275   4,428,613   4,233,942
 First Express
  Transactions
  Processed     87,585,406  90,818,856  91,229,168  93,155,912  96,412,243


   NOTE:  The business line financial information excludes significant
           nonrecurring items, such as security gains and losses.
           Expenses have been allocated based on management's best
           estimates, and equity has been assigned to reflect the
           inherent risk in each individual business line.


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