First Horizon National Corp. Sells Merchant Processing Business to NOVA

First Horizon National Corp. announced today that it has entered into a definitive agreement to sell its national merchant processing business, First Horizon Merchant Services (FHMS), to NOVA Information Systems (NOVA), a wholly owned subsidiary of U.S. Bancorp. As part of the agreement, First Horizon has also entered into an agreement that will offer NOVA’s merchant processing services to First Horizon’s current and prospective customers. The transaction, which is expected to close in the first quarter of 2006, is subject to customary approvals and closing conditions.

This transaction is expected to result in a pre-tax gain to FHN of approximately $340 million. FHN expects to use a portion of the net gain from the transaction to repurchase approximately four million shares of its common stock. The remaining proceeds are expected to be utilized primarily to execute earnings enhancement initiatives, increase the amount of shares repurchased, or provide extra capital for growth. Taken in their entirety, First Horizon expects the transactions to be accretive for 2006 and beyond and to provide support for its plans to create earnings enhancements in 2006.

“This accretive transaction allows First Horizon to immediately create shareholder value and continue to focus on our strategic businesses which leverage our ability to build strong relationships with our customers across all of our product lines,” said Ken Glass, First Horizon’s chairman and chief executive officer.