FIRST HORIZON CORP — Annual Report 2007

Jun 29, 2007

11-K 1 c49212_form11-k.htm

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 11-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _ to ___

Commission File No. 001-15185

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN* (Full Title of Plan)

*Formerly known as First Tennessee National Corporation Savings Plan and Trust

FIRST HORIZON NATIONAL CORPORATION (Issuer of Securities Held Pursuant to Plan)

165 MADISON AVENUE MEMPHIS, TENNESSEE 38103 (Address of Principal Executive Office of Issuer and of Plan)

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Financial Statements and Supplemental Schedule

December 31, 2006 and 2005

(With Report of Independent Registered Public Accounting Firm Thereon)

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Index to Financial Statements and Supplemental Schedule

	Page
Report of Independent Registered Public Accounting
Firm	1
Financial Statements:
Statements of Net Assets Available
for
Benefits, December 31, 2006 and 2005	2
Statement of Changes in Net Assets
Available for Benefits, Year ended December 31, 2006	3
Notes to Financial Statements	4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of
Assets
(Held at End of Year), December 31, 2006	10

Note: All other schedules required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because there is nothing to report.

KPMG LLP Suite 900, Morgan Keegan Tower Fifty North Front Street Memphis, TN 38103

Report of Independent Registered Public Accounting Firm

The Pension, Savings and Flexible Compensation Committee of First Horizon National Corporation:

We have audited the accompanying statements of net assets available for benefits of First Horizon National Corporation Savings Plan (the Plan) as of December 31, 2006 and 2005, and the related statement of changes in net assets available for benefits for the year ended December 31, 2006. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2006 and 2005, and the changes in its net assets available for benefits for the year ended December 31, 2006, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule H, Line 4i – Schedule of Assets (Held at End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2006 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the 2006 basic financial statements taken as a whole.

Memphis, Tennessee June 29, 2007

KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG International, a Swiss cooperative.

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Statements of Net Assets Available for Benefits

December 31, 2006 and 2005

	2006	2005
Assets:
Investments - at fair value:
First Horizon National Corporation, common
stock	$ 316,456,427	$ 317,598,814
Mutual funds	304,413,377	237,126,844
Money market funds	36,567,816	35,823,891
Stable value funds (common/collective
trust)	26,306,392	23,808,309
Participant loans	17,242,722	17,385,161
Segregated participant investments	2,053,415	1,891,076
Total investments - at fair value	703,040,149	633,634,095
Adjustment to contract value from fair
value for interest in common/collective trust relating to fully benefit-responsive
investment contracts	573,996	369,384
Total investments	703,614,145	634,003,479
Cash	1,481,908	620,421
Receivables:
Employee contributions	668,708	643,166
Employer contributions	427,947	317,877
Interest	4,256	3,934
Dividends	3,441,928	3,720,622
Due from broker	1,408,195	551,929
Total receivables	5,951,034	5,237,528
Total assets	711,047,087	639,861,428
Liabilities:
Participant loans payable	145,768	64,949
Income taxes payable	32,037	5,707
Due to broker	277,118	402,729
Other liabilities	313,447	301,721
Total liabilities	768,370	775,106
Net assets available for benefits	$ 710,278,717	$ 639,086,322

See accompanying notes to financial statements.

2

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Statement of Changes in Net Assets Available for Benefits

Year ended December 31, 2006

	2006
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of
investments	$ 47,567,644
Interest income	3,134,151
Dividend income	31,413,163
Total
investment income	82,114,958
Contributions:
Participants	43,386,175
Employer	18,393,348
Rollovers	2,677,360
Total
contributions	64,456,883
Total
additions	146,571,841
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants or
beneficiaries	74,402,920
Corrective distributions	48,405
Administrative expenses	928,121
Total
deductions	75,379,446
Net
increase	71,192,395
Net assets available for
benefits:
Beginning of year	639,086,322
End of year	$ 710,278,717

See accompanying notes to financial statements.

3

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Notes to Financial Statements December 31, 2006 and 2005

(1) Plan Description

The following description of First Horizon National Corporation Savings Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

The Plan is a defined contribution plan established April 23, 1978, for qualified employees of First Horizon National Corporation and certain affiliates (the Company) to provide a savings plan for those employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Since inception, the Plan agreement has been amended periodically to conform with provisions of ERISA and other laws and regulations. The Plan is administered by the Pension, Savings and Flexible Compensation Committee. Nationwide Trust Company, FSB (NTC) serves as trustee of the Plan. Pursuant to the Plan document, certain retirees are allowed to segregate and direct their accounts into investments outside the boundaries of investment options available to active participants and defer payment of benefits. These accounts are presented in a single line item in the financial statements and are trusteed by First Tennessee Bank National Association (FTBNA), the Company’s primary affiliate. The 401(k) Company serves as record keeper of the Plan.

| (a) |
| --- |
| Under the
terms of the Plan, full-time employees are eligible to participate in the
Plan immediately. Part-time employees are eligible to participate upon
completion of twelve months of service in which they have worked at least
1,000 hours. A participant may authorize payroll deductions from 1% to 100%
of eligible pay (subject to certain legal limitations) as contributions, to
be invested as authorized by the participant. The Plan allows participants to
make pre-tax contributions (from 1% to 90% of eligible pay) and after-tax
contributions (from 1% to 10% of eligible pay). Participants may also
rollover amounts representing distributions from other defined benefit and/or
defined contribution plans. Participants direct their contributions into
various investment options offered by the Plan and may elect to change their
investment authorizations at any time. |
| The Company
makes two types of contributions on behalf of participants to the Plan –
Company matching contributions and Company savings contributions. After one
year of service, all participants are eligible for matching contributions.
All participants receive 50% of the first 1% to 6% of participant pre-tax
contributions invested in the First Horizon National Corporation Stock Fund
(ESOP), except First Horizon Home Loan Corporation (FHHLC) participants.
FHHLC participants receive 50% of the first 1% to 6% of participant pre-tax
contributions invested in any of the investment options. |

4

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Notes to Financial Statements December 31, 2006 and 2005

| | The Company
provides Flexible Dollars to employees to spend on benefits or to deposit
into the Plan. Participants’ Flexible Dollars deposited into the Plan are
identified as Company savings contributions and are not eligible for matching
contributions. All contributions, and allocated earnings or losses thereon,
are 100% vested. |
| --- | --- |
| (b) | Payment of Benefits |
| | On
termination of service due to death, disability or retirement, a participant
or beneficiary may elect to receive a lump-sum amount equal to the value of
the participant’s interest in their account, or installment payouts, as
defined. For termination of service for other reasons, a participant may
receive the value of the interest in their account as a lump-sum
distribution. The Plan also provides for in-service and hardship withdrawals.
A participant may request a withdrawal of all or part of their after-tax,
rollover and profit sharing contributions at any time. Upon obtaining the age
of 59 ½, a participant may request a withdrawal of all or a portion of the
value of their account. In-service withdrawals are limited to four such
withdrawals during a calendar year. Hardship withdrawals are allowed at any
time for certain financial needs, as defined. Account balances invested in
the ESOP may be received in the form of shares of stock. Also, annually, a
participant may request a withdrawal of certain contributions invested in the
ESOP in the form of Company stock. |
| (c) | Participant Accounts |
| | Each
participant’s account is credited with the participant’s contributions, the
Company’s contributions and Plan earnings, and is charged with an allocation
of asset management fees, Plan losses and certain other recordkeeping
expenses. Allocations are based on participant contributions or account
balances, as defined. The benefit to which a participant is entitled is the
benefit that can be provided from the participant’s vested account balance. |
| (d) | Participant Loans |
| | Participants
may borrow from their accounts a minimum of $1,000 up to the lesser of
$50,000 or 50% of their vested account balance. General purpose loan terms
range from 6 to 60 months and primary residence loan terms range from 6 to
120 months. The loans are secured by the balance in the participant’s account
and bear interest at the prime interest rate at the time of the participant’s
loan request. Principal and interest is paid ratably through payroll
deductions. Up to three loans may be outstanding at one time, but
participants can have only one general purpose loan and one primary residence
loan per calendar year. |

5

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Notes to Financial Statements December 31, 2006 and 2005

(2)
(a)	Use of Estimates
	The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of net assets
available for benefits and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates.
(b)	Change in Presentation
	In December
2005, the Financial Accounting Standards Board (FSAB) issued FASB Staff
Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the
AICPA Investment Company Guide and Defined-Contribution Health and Welfare
and Pension Plans (FSP). This FSP requires investments in benefit-responsive
investment contracts be presented at fair value. However, contract value is
the relevant measurement attribute for that portion of the net assets
available for benefits of a defined contribution plan attributable to fully
benefit-responsive investment contracts because contract value is the amount
participants would receive if they were to initiate permitted transactions
under the terms of the Plan. The Plan invests in investment contracts through
a common/collective trust. As required by the FSP, the Statement of Net
Assets Available for Benefits presents the fair value of the investments in
the common/collective trust as well as the adjustment of the investment in
the common/collective trust from fair value to contract value relating to the
investment contracts. The Statement of Changes in Net Assets Available for
Benefits is prepared on a contract value basis. The result of the
implementation of the FSP was to decrease investments and to increase the
adjustment from fair value to contract value by $573,996 and $369,384 as of
December 31, 2006 and 2005, respectively.
(c)	Investment Valuation and Income Recognition
	Investments
in mutual funds and the money market funds are stated at fair value based on
the closing net asset value of shares held by the Plan at year end. The
investment in the common/collective trust (stable value fund) is stated at
contract value as determined by the issuer based on the cost of the
underlying investments plus accrued interest income less amounts withdrawn to
pay benefits. The fair value of the common collective trust fund is based on
discounting the related cash flows of the underlying guaranteed investment
contracts based on current yields of similar instruments with comparable
durations. Investments in common stocks are valued at the last reported sales
price on the last business day of the year. U.S. government agency securities
are valued at the mean of the bid and ask prices on the last business day of
the year. Loans to participants are stated at the unpaid principal balance,
which the Plan’s management believes approximates fair value.

6

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Notes to Financial Statements December 31, 2006 and 2005

| | | Investment
transactions are recorded on a trade-date basis. Interest income is recorded
on the accrual basis and is recognized when earned. Dividend income is
accrued on the ex-dividend date. Realized gains and losses from investment
transactions are reported on the average cost method. Investment income
includes unrealized appreciation and depreciation of investments. |
| --- | --- | --- |
| | | Pursuant to the Plan
document, certain retirees are allowed to segregate and direct the investment
of their accounts and defer payment of benefits. These investments are
individually valued according to the accounts and are presented in a single
line item in the financial statements. |
| | (d) | Contributions |
| | | Participant
contributions are recognized when withheld, and Employer contributions are
recognized when due. Rollovers are recognized when approved by the Plan
Sponsor. |
| | (e) | Benefit Payments |
| | | Benefits
paid to participants or beneficiaries are recognized when paid. |
| | (f) | Administrative Expenses |
| | | Administrative
expenses are recognized when incurred. |
| (3) | Plan Termination | |
| | Although it
has not expressed any intent to do so, the Plan Sponsor has the right under
the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. | |
| (4) | Tax Status of Plan | |
| | The Internal
Revenue Service (IRS) has determined and informed the Plan Sponsor by a
letter dated October 24, 2002, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receipt of such letter; however, the Plan’s
management believes that the Plan remains in compliance with the applicable
requirements of the IRC. | |
| | The income
tax payable of $32,037 and $5,707 as of December 31, 2006 and 2005,
respectively, represents participant taxes for early withdrawal. These taxes
are withheld by the Plan Sponsor on behalf of the participant and remitted to
the IRS. | |
| | A contribution to the Plan by December 31, 2006 would have
satisfied and corrected a 2005 Average Deferral Percentage (ADP) discrimination
test excess under Internal Revenue Code Section 401(k)(3). That contribution
was not made within the statutory timeframe. Under the IRS "Self Correction
Program" (SCP) established by the Employee Plans Compliance Resolution System
this testing failure can be corrected under alternative methods, by making
a contribution to the Plan and by contributing earnings through the date
of the correction. The precise contribution amount under the alternative
methods is not yet available. A correction by December 31, 2008 is permitted
without further tax consequence or IRS involvement. The Company intends to
make the necessary, timely correction under SCP. | |

7

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Notes to Financial Statements December 31, 2006 and 2005

(5)	Related Party Transactions
	Certain Plan
investments held in 2005 were shares of mutual funds managed by Highland
Capital Management Corporation and Martin & Company, Inc., wholly-owned
subsidiaries of the Plan Sponsor. Therefore, transactions related to these
mutual funds, as well as transactions related to FHNC common stock, qualify
as party-in-interest transactions.
(6)	Investments
	The
following presents investments that represent 5 percent or more of the
Plan’s net assets at December 31, 2006 and 2005:

	2006	2005
First
Horizon National Corporation – Common Stock	$ 316,456,427	$ 317,598,814
Royce Premier
Fund	67,646,142	58,920,859
Dodge &
Cox Balanced Fund	64,804,737	45,743,034
Harbor Fund
International Fund	58,264,756	34,699,903
Goldman
Sachs Structured US Equity	47,778,320	—
Goldman
Sachs Financial Square	36,516,799	—
Vanguard 500
Index	35,798,434	—
First Funds
Core Equity I	—	44,939,572
First Funds
US Government Portfolio	—	35,694,744

For the period ended December 31, 2006, the Plan’s investments, including gains and losses on investments bought and sold as well as held during the year, appreciated in value by $47,567,644, as follows:

	2006
First
Horizon National Corporation – Common Stock	$ 26,750,206
Mutual Funds	20,592,427
Segregated
Participant Investments	225,011
	$ 47,567,644

8

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Notes to Financial Statements December 31, 2006 and 2005

| (7) |
| --- |
| The
following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 at December 31, 2006 and 2005: |

	2006	2005
Net assets
available for benefits per the financial statements	$ 710,278,717	$ 639,086,322
Less:
Benefits payable	35,074	482,165
Adjustment
to contract value	573,996	—
Net assets
available for benefits per the Form 5500	$ 709,669,647	$ 638,604,157

The following is a reconciliation of benefits paid to participants and investment income per the financial statements to the Form 5500 for the year ended December 31, 2006:

| Benefits
paid to participants per the financial statements | 2006 — $ 74,402,920 | |
| --- | --- | --- |
| Less:
accrual for prior year | (482,165 | ) |
| Add: accrual
for current year | 35,074 | |
| Benefits
paid to participants per the Form 5500 | $ 73,955,829 | |

| Total
investment income per the financial statements | 2006 — $ 82,114,958 | |
| --- | --- | --- |
| Less:
adjustment to contract value | (573,996 | ) |
| Total
investment income per the Form 5500 | $ 81,540,962 | |

9

FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

Plan Number: 002 EIN: 62-0803242 December 31, 2006

(a)	(b)	(c)
	Identity of issue, borrower, lessor, or similar party	Description of investment including maturity date, rate of interest, collateral, par, or maturity value	Current value
	Federated Capital Reserves	Money market fund	$ 51,017
	Goldman Sachs Financial
Square	Money market fund	36,516,799
	Amvescap National Trust
Company	Common collective trust -
stable value fund	26,306,392
	Dodge & Cox Balanced
Fund	Mutual fund	64,804,737
	Goldman Sachs Core Fixed
Income/Inst	Mutual fund	18,748,860
	Goldman Sachs Structured
Small Cap Equity	Mutual fund	11,372,128
	Goldman Sachs Structured US
Equity	Mutual fund	47,778,320
	Harbor Fund International
Fund	Mutual fund	58,264,756
	Royce Premier Fund	Mutual fund	67,646,142
	Vanguard 500 Index Fund -
Admiral	Mutual fund	35,798,434
*	First Horizon National
Corporation	First Horizon National Corporation Common stock
fund, 7,574,352 shares	316,456,427
*	Various participants	Loan fund, interest rates ranging from 4.0% to 9.5% with varying
maturity dates through 2016, collateralized by participants’ right, title and
interest in and to the Plan	17,242,722
	Segregated participant
investments:
	Fidelity Inst’l Govt
Portfolio	Money market fund	414,121
	Federal Home Loan Bank	U.S. government agency note, 6.0%, due 2/12/2016	96,497
	Federal Home Loan Mortgage
Corporation	U.S. government agency pool #182031, 10.0%, due 12/1/2010	116
	Cross A T Company	Corporate stock, 1000 shares	7,600
	Deltic Timber Corporation	Corporate stock, 571 shares	31,851
	Dow Jones & Company,
Inc.	Corporate stock, 1000 shares	38,000
	JP Morgan Chase &
Company	Corporate stock, 720 shares	34,776
	Merrill Lynch &
Company, Inc.	Corporate stock, 6800 shares	633,080
	Miller Herman, Inc.	Corporate stock, 4000 shares	145,440
	Murphy Oil Corporation	Corporate stock, 8000 shares	406,800
	Parametric Technology
Corporation	Corporate stock, 553 shares	9,965
	Servicemaster Company	Corporate stock, 6750 shares	88,493
	Supervalu, Inc.	Corporate stock, 4000 shares	143,000
*	First Horizon National
Corporation	First Horizon National Corporation, 88 shares	3,676
			$ 703,040,149

• Indicates party-in-interest to the Plan.

See accompanying independent auditors’ report.

10

EXHIBITS

The following documents are filed as exhibits to this Form 11-K:

1. Consent of Independent Registered Public Accounting Firm.

SIGNATURES

The Plan . Pursuant to the requirements of the Securities Exchange Act of 1934, the Pension, Savings and Flexible Plan Committee of the First Horizon National Corporation Savings Plan (“Plan”) has duly caused this annual report to be signed on behalf of the Plan by the undersigned hereunto duly authorized.

| | FIRST
HORIZON NATIONAL CORPORATION | |
| --- | --- | --- |
| | | SAVINGS PLAN |
| Date: June
29, 2007 | By: | /s/ ROBERT
E. ELLIS |
| | | Robert E.
Ellis |
| | | Senior Vice
President – Manager Financial |
| | | Operations
and Member of the Pension, |
| | | Savings and
Flexible Plan Committee |

EXHIBIT INDEX

No.	Description
23	Consent of
Independent Registered Public Accounting Firm