First Horizon 8K Results of Operations and Financial Condition | FHN 22 Jan 21

First Horizon Corporation Reports Fourth Quarter Net Income Available to Common of $234 million,

or EPS of $0.42; $255 million, or $0.46, on an Adjusted basis*

Fourth quarter 2020 ROTCE of 16.7%; Adjusted ROTCE of 18.2%*

2020 net income available to common stockholders of $822 million, or EPS of $1.89; $528 million, or EPS of $1.22, on an Adjusted basis*

Tangible book value per share of $10.23 up 3% in the quarter

MEMPHIS, TN (January 22, 2021) – First Horizon Corporation (NYSE: FHN or “First Horizon”) today reported fourth quarter 2020 net income available to common shareholders ("NIAC") of $234 million, or earnings per share of $0.42, compared with third quarter 2020 NIAC of $523 million, or earnings per share of $0.95. Fourth quarter 2020 results were reduced by a net $20 million after-tax, or $0.04 per share, of notable items largely related to the IBERIABANK Corporation Merger ("IBKC Merger") compared with a net $331 million after-tax benefit, or $0.60 per share, in third quarter 2020. Excluding notable items, adjusted fourth quarter NIAC totaled $255 million, or $0.46 per share, compared with $193 million, or $0.35 per share in third quarter 2020.*

Full year 2020 NIAC of $822 million, or earnings per share of $1.89, compares with $435 million, or earnings per share of $1.38, in 2019, largely reflecting the impact of the IBKC Merger which closed on July 1, 2020. 2020 results include a net $294 million after-tax benefit, or $0.68 per share, from notable items largely related to the IBKC merger and Truist branch acquisition compared with a net $90 million after-tax, or $0.29 per share, reduction tied to notable items in 2019. On an adjusted basis, full year 2020 NIAC of $528 million, or earnings per share of $1.22, compares with NIAC of $525 million, or $1.66 per share, in 2019. Results prior to third quarter 2020 reflect legacy First Horizon results only.

“I am tremendously proud of our performance this year and the results we delivered despite the challenging landscape. We clearly benefited from strong fixed income and mortgage banking fees and disciplined expense management," said Chief Executive Officer and President Bryan Jordan. “We are executing well on our merger of equals with IBERIABANK, and I am even more confident today in the power of our diversified business model, expanded footprint and combined expertise to meet the needs of our clients.”

Jordan continued, "I commend our associates for their unwavering commitment to our clients, communities and core values. Throughout a year of unprecedented challenges, our team achieved transformational milestones with incredible resiliency. Looking ahead, we remain focused on successfully executing on the integration, delivering on our strategic priorities, and investing in products and technology to ensure an exceptional client experience and help drive enhanced shareholder value."

Fourth Quarter and Full Year 2020 Notable and Unusual Items


Notable Items
Quarterly, Unaudited

($s in millions, except per share data)	4Q20		3Q20		4Q19		2020		2019

Summary of Notable Items:
Purchase accounting gain	$	1	$	532	$	—	$	533	$	—
Merger/acquisition non-PCD provision expense	—		(147)		—		(147)		—
Merger/acquisition expense	(34)		(101)		(16)		(155)		(39)
Charitable contributions	—		(15)		(11)		(15)		(11)


Other notable expenses	—		—		(10)		—		(64)
Total Notable items (pre-tax)	$	(33)	$	269	$	(37)	$	216	$	(114)
Total Notable items (after-tax)	(20)		331		(30)		294		(90)
EPS impact of notable items	$	0.04	$	(0.60)	$	0.10	$	(0.68)	$	0.29

*References to "Adjusted" results exclude notable items and are Non-GAAP Financial Measures. All references to loans include leases. All references to earnings per share are based on diluted shares. Please see page 7 for information on our use of Non-GAAP measures and a reconciliation of these measures to GAAP beginning on page 22

Fourth quarter 2020 results reflect a $20 million after-tax, or $0.04 per share, decrease tied to notable items compared with a net $269 million, or $0.60 per share, benefit in third quarter 2020. Fourth quarter notable items largely relate to the IBKC Merger/Branch Acquisition and include:

•$34 million of merger-related expense largely tied to IBKC merger integration costs

In addition to the above notable items, 4Q20 adjusted results were impacted by the following unusual items:

•$5 million net reduction to NII, or a 3 basis point net interest margin impact, largely tied to a promotional credit card offering.

•$3 million of securities losses in other noninterest income tied to modest repositioning of the securities portfolio.

•$8 million in incentives and commissions tied to a one-time $1,000 bonus to approximately 5,000 employees and COVID-related vacation carryover net accrual costs.

•$5 million benefit to other noninterest expense tied to lower regulatory-related costs, largely FDIC insurance.

2020 results reflect a $294 million after-tax benefit, or $0.68 per share, from notable items largely related to the IBKC merger and Truist branch acquisition.

Fourth Quarter 2020 Highlights*

•Total revenue of $810 million decreased $545 million from unusually high third quarter 2020 levels which included a $532 million merger purchase accounting gain in notable items. Adjusted revenue of $810 million decreased from $823 million in third quarter 2020 largely driven by an $8 million decrease tied to unusual items. Results also reflect the impact of net interest income headwinds and continued COVID-19 impacts on traditional banking businesses which were largely offset by continued strength in fixed income and mortgage banking.

•Noninterest expense of $508 million decreased $79 million from third quarter 2020 driven by a $82 million decrease in notable items. Adjusted expense of $474 million increased $3 million from third quarter 2020, and included a net $3 million increase tied to unusual items. Adjusted expense before the impact of unusual items largely reflects lower personnel expense and an increase in outside services which included the impact of seasonality. Results also reflect the benefit of a $6 million increase in merger cost saves from third quarter 2020.

•Provision for credit losses of $1 million decreased $226 million from third quarter 2020, largely reflecting an improved overall macroeconomic outlook and included a $28 million reserve release.

•Results reflect an efficiency ratio of 63%, or 59% on an adjusted basis.

•Tangible book value per share of $10.23 at December 31, 2020 increased 3% from $9.92 as of September 30, 2020. The IBKC Merger was accretive to tangible book value per share within six months, well ahead of the estimated two-year earnback period.

•ROCE of 12.53%; ROTCE of 16.73%; Adjusted ROTCE of 18.18%; CET 1 of 9.67%; and total capital of 12.55%

Strategic Plan Update

•Merger integration is well underway with targeted cost saves upsized from $170 million to $200 million

•Achieved annualized merger cost saves of approximately $56 million in fourth quarter 2020.

COVID-19 Update

•Accepting applications and continuing to monitor updates from the Small Business Administration regarding the second round of the Paycheck Protection Program ("PPP") and the ability to apply for a new or additional loan.

•Loans on deferral declined to 0.9% of total loans excluding PPP as of December 31, 2020, compared with 2.4% at September 30, 2020.


SUMMARY RESULTS, Continued
Quarterly, Unaudited

										4Q20 Change vs.
($s in millions, except per share and balance sheet data)	4Q20			3Q20			4Q19			3Q20				4Q19
										$/bp			%	$/bp			%
Income Statement
Net interest income	$	522		$	532		$	311		$	(11)		(2)	$	210		68
Noninterest income1	288			823			183			(534)			(65)	105			57
Total revenue	810			1,355			495			(545)			(40)	315			64
Noninterest expense	508			587			328			(79)			(13)	180			55
Pre-provision net revenue2	302			768			166			(466)			(61)	136			82
Provision for credit losses3	1			227			9			(226)			(100)	(8)			(89)
Income before income taxes	301			541			157			(240)			(44)	144			92
Provision for income taxes	56			2			36			54			NM	20			57
Net income	245			539			121			(294)			(55)	124			102
Net income attributable to noncontrolling interest	3			3			3			—			(5)	—			(3)
Net income/(loss) attributable to controlling interest	242			536			118			(294)			(55)	124			104
Preferred stock dividends	8			13			2			(5)			(40)	6			NM
Net income/(loss) available to common shareholders	$	234		$	523		$	117		$	(289)		(55)	$	118		101

Adjusted net income4	$	265		$	208		$	151		$	57		27	$	114		75
Adjusted net income/(loss) available to common shareholders4	$	255		$	193		$	147		$	62		32	$	108		73
Common stock information
EPS	$	0.42		$	0.95		$	0.37		$	(0.53)		(56)	$	0.05		14
Adjusted EPS4	$	0.46		$	0.35		$	0.47		$	0.11		31	$	(0.01)		(2)


Diluted shares	557			551			313			6			1	244			78
Key performance metrics
Net interest margin	2.71		%	2.84		%	3.26		%	(13)		bp		(55)		bp
Efficiency ratio	62.71			43.31			66.35			1,940				(364)
Adjusted efficiency ratio4	58.57			57.26			58.88			131				(31)
Effective income tax rate	18.70			0.41			22.87			1,829				(417)
Return on average assets	1.16			2.63			1.12			(147)				4
Adjusted return on average assets4	1.26			1.01			1.40			25				(14)
Return on average common equity (“ROCE")	12.53			28.49			9.97			(1,596)				256

Return on average tangible common equity (“ROTCE”)4	16.73			37.75			15.03			(2,102)				170
Adjusted ROTCE4	18.18			13.90			18.88			428				(70)
Noninterest income as a % of total revenue	35.61			60.72			37.05			(2,511)				(144)
Adjusted noninterest income as a % of total revenue4	35.56		%	35.32		%	37.05		%	24		bp		(149)		bp
Balance Sheet (billions)
Average loans	$	59.8		$	60.1		$	30.7		$	(0.3)		—	$	29.1		95
Average deposits	69.6			67.1			32.8			2.5			4	36.9			112
Average assets	83.8			81.7			42.9			2.1			3	40.9			95
Average common equity	$	7.4		$	7.3		$	4.6		$	0.1		2	$	2.8		60
Asset Quality Highlights

Allowance for credit losses to loans and leases	1.80		%	1.80		%	0.66		%	—		bp		114		bp

Net charge-off ratio	0.19			0.44			0.04			(25)				15

Nonperforming loan and leases ratio	0.66		%	0.75		%	0.52		%	(8)		bp		14		bp
Capital Highlights (current quarter is an estimate)



Common Equity Tier 1	9.67		%	9.21		%	9.20		%	46		bp		47		bp
Tier 1	10.73			10.25			10.15			48				58
Total Capital	12.55			12.05			11.22			50				133
Tier 1 leverage	8.24		%	8.25		%	9.04		%	(1)		bp		(80)		bp

Numbers may not foot due to rounding.

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

See footnote disclosures on page 22.


SUMMARY RESULTS, Continued
Year-end, Unaudited

							2020 Change vs.
(In millions, except EPS)	2020			2019			2019
							$/bp			%
Income Statement
Net interest income	$	1,662		$	1,210		$	452		37
Noninterest income1	1,492			654			838			128
Total revenue	3,155			1,864			1,291			69
Noninterest expense	1,718			1,233			485			39
Pre-provision net revenue2	1,436			631			805			128
Provision for credit losses3	503			45			458			NM
Income before income taxes	933			586			347			59
Provision for income taxes	76			133			(57)			(43)
Net income	857			452			405			89
Net income attributable to noncontrolling interest	12			11			1			5
Net income/(loss) attributable to controlling interest	845			441			404			92
Preferred stock dividends	23			6			17			NM
Net income available to common shareholders	$	822		$	435		$	387		89

Adjusted net income4	$	563		$	543		$	20		4
Adjusted net income/loss available to common shareholders4	$	528		$	525		$	3		1
Common stock information
EPS	$	1.89		$	1.38		$	0.51		37
Adjusted EPS4	$	1.22		$	1.66		$	(0.45)		(27)


Diluted shares	434			316			118			37
Key performance metrics
Net interest margin	2.86		%	3.28		%	(42)		bp
Efficiency ratio	54.47			66.15			(1,168)
Adjusted efficiency ratio4	59.06			60.02			(96)
Effective income tax rate	8.15			22.76			(1,461)
Return on average assets	1.33			1.08			25
Adjusted return on average assets4	0.87			1.30			(43)
Return on average common equity (“ROCE")	13.66			9.60			406

Return on average tangible common equity (“ROTCE”)4	19.03			14.71			432
Adjusted ROTCE4	12.15			17.60			(545)
Noninterest income as a % of total revenue	47.31			35.09			1,222
Adjusted noninterest income as a % of total revenue4	36.60		%	35.09		%	151		bp
Balance Sheet (billions)
Average loans	$	46.2		$	29.2		$	17.0		58
Average deposits	51.9			32.4			19.5			60
Average assets	64.3			41.7			22.6			54
Average common equity	$	6.0		$	4.5		$	1.5		33
Asset Quality Highlights

Allowance for credit losses to loans and leases	1.80		%	0.66		%	114		bp

Net charge-off ratio	0.19			0.04			15

Nonperforming loan and leases ratio	0.66		%	0.52		%	14		bp
Capital Highlights (current quarter is an estimate)



Common Equity Tier 1	9.67		%	9.20		%	47		bp
Tier 1	10.73			10.15			58
Total Capital	12.55			11.22			133
Leverage	8.24		%	9.04		%	(80)		bp

Fourth Quarter versus Third Quarter 2020

Net interest income

Net interest income of $522 million decreased $11 million from third quarter 2020 driven by an $8 million reduction in net loan accretion and securities premium amortization largely related to the IBKC merger and a net $5 million decrease largely tied to a promotional credit card offering included in unusual items. On a core basis, net interest income remained relatively stable. Net interest margin of 2.71% compares with 2.84% in the prior quarter and reflects a 13 basis point reduction tied to net merger accounting impacts and a 9 basis point reduction from higher excess cash balances. Core net interest margin excluding the impact of net merger accounting accretion, the impact of PPP loans and the impact of an increase in excess cash balances remained relatively stable.

Loans and leases

Average fourth quarter 2020 loan and lease balances of $59.8 billion decreased $298 million from third quarter 2020 largely reflecting a reduction in consumer real estate-secured and commercial real estate which more than offset a modest increase in commercial and industrial driven by growth in loans to mortgage companies. Period-end fourth quarter 2020 loans and leases of $58.2 billion decreased $1.5 billion driven by lower commercial and industrial, consumer real estate and commercial real estate.

Deposits

Average deposits of $69.6 billion increased $2.5 billion, driven by a $1.4 billion increase in savings and a $1.2 billion increase in demand deposits. Period-end deposits of $70.0 billion at December 31, 2020, increased $1.6 billion from $68.4 billion at September 30, 2020 reflecting growth in demand deposits, savings and other interest-bearing deposits. Interest-bearing deposit costs of 26 basis points improved 10 basis points linked quarter, reflecting continued pricing discipline.

Noninterest income

Noninterest income of $288 million decreased $534 million from unusually high third quarter levels that included a $532 million benefit from notable items. On an adjusted basis, noninterest income of $288 million decreased $4 million driven by $3 million of securities losses in other noninterest income tied to modest repositioning of the securities portfolio. Adjusted noninterest income remained relatively stable including this impact as seasonally lower results in mortgage banking more than offset improvement in all other categories. Fixed income noninterest income decreased $7 million linked quarter largely reflecting the impact of day count and lower fees in other products. Fixed income average daily revenue of $1.5 million was relatively stable with third quarter levels.

Noninterest expense

Noninterest expense of $508 million decreased $79 million from third quarter 2020 driven by a net $82 million reduction in notable items. Adjusted noninterest expense of $474 million increased $3 million from third quarter 2020 driven by a net $3 million impact from unusual items in incentives and commissions and other noninterest expense. Results also reflect the benefit of an annualized $56 million increase in merger-related cost saves.*

Asset quality

Net charge-offs of $29 million, or 19 basis points, decreased from unusually high third quarter levels of $67 million, or 44 basis points, which reflected higher energy portfolio losses.

Nonperforming loans of $386 million decreased $60 million from third quarter 2020 driven by a reduction in energy. Fourth quarter 2020 allowance to nonperforming coverage ratio of 249% compared with 221% in third quarter 2020. Fourth quarter 2020 nonperforming loans to loans ratio of 66 basis points compared with 75 basis points at third quarter 2020.

The allowance for credit losses to loans ratio remained steady at 1.80%.

Provision for credit losses of $1 million decreased $226 million from third quarter 2020 driven by a $147 million decrease in notable items tied to the IBKC Merger and Truist Branch Acquisition. Adjusted provision for credit losses of $1 million decreased $79 million linked quarter.*

Reserve release of $28 million reflects de-risking of the Energy portfolio through contracted loan sale expected to close in January 2021, lower balances and improving economic scenarios.

Capital

CET1 ratio of 9.67% in fourth quarter 2020 improved from 9.21% in third quarter 2020.

On October 27, 2020, the board of directors approved payment of a quarterly cash dividend on its common stock of $0.15 per share. The dividend was payable January 4, 2021, to the common shareholders of record on December 11, 2020. The board also approved payment of cash dividends on First Horizon’s Series A, Series B, Series C and Series E Preferred Stock.

Income taxes

The fourth quarter 2020 effective tax rate of 18.7% increased from the unusually low third quarter 2020 level of 0.4% which resulted from non-taxable IBKC Merger purchase accounting gain. On an adjusted basis, the effective tax rate of 20.7% in fourth quarter 2020 decreased from 23.3% in third quarter 2020.

Conference call information

Analysts, investors and interested parties may call toll-free starting at 8:15 a.m. CT on January 22 by dialing 1-888-317-6003 (if calling from the U.S.) or 412-317-6061 (if calling from outside the U.S) and entering access code 5989125. The conference call will begin at 8:30 a.m. CT.

Participants can also opt to listen to the live audio webcast with the accompanying slide presentation at http://ir.fhnc.com/Event.

A replay of the call will be available beginning at noon CT on January 22 until midnight CT on February 5 . To listen to the replay, dial 1-877-344-7529 (U.S. callers) or 412-317-0088 (international callers); the access code is 10150084. A replay of the webcast will also be available at http://ir.fhnc.com/Event and will be archived on the site for one year.

Forward-Looking Statements

This communication may contain forward-looking information, including guidance, involving significant risks and uncertainties. Forward-looking information is identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "should," "is likely," "will," "going forward," and other expressions that indicate future events and trends and may be followed by or reference cautionary statements. A number of factors could cause actual results to differ materially from results stated in or suggested by forward-looking information. Those factors include: general economic and financial market conditions, including expectations of and actual timing and amount of interest rate movements including the slope of the yield curve; competition; ability to execute business plans; regional, national, and world-wide political developments; recent and future legislative and regulatory developments; inflation or deflation; market (particularly real estate market) and monetary fluctuations; pestilence; man-made or natural disasters; customer, investor and regulatory responses to any of those conditions or events; matters mentioned in this release; critical accounting estimates; FHN’s success in executing its business plans and strategies following its 2020 merger with IBERIABANK Corporation, and managing the risks involved; the potential impacts on FHN’s businesses of the coronavirus COVID-19 pandemic, including negative impacts from quarantines, market declines, and volatility, and changes in customer behavior related to COVID-19; and other factors described in FHN's annual report on Form 10-K, FHN’s other recent filings with the SEC, and FHN’s most recent earnings release and related materials. FHN disclaims any obligation to update any forward-looking statements to reflect future events or developments, or changes in expectations.

Use of Non-GAAP Measures and Regulatory Measures that are not GAAP

Certain measures are included in this financial supplement that are “non-GAAP,” meaning (under U.S. financial reporting rules) they are not presented in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.

Presentation of regulatory measures, some of which follow regulatory definitions rather than GAAP, provides a meaningful base for comparability to other financial institutions subject to the same regulations as FHN. Such measures are used by the various banking regulators in reviewing the performance, stability, and capital adequacy of financial institutions they regulate. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this financial supplement include: common equity tier 1 capital, generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; and risk weighted assets (“RWA”), which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios.

The non-GAAP measures presented in this earnings release are pre-provision net revenue ("PPNR"), return on average tangible common equity (“ROTCE”), tangible common equity (“TCE”) to tangible assets (“TA”), and tangible book value ("TBV") per common share, and various consolidated and segment results and performance measures and ratios adjusted for notable items.

Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items beginning on page 22 .


CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited

																4Q20 Change vs.														2020 vs 2019
($s in millions, except per share data)	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20				4Q19				2020			2019
																$		%		$		%								$		%
Interest income	$	574		$	598		$	347		$	378		$	404		$	(24)	(4)	%	$	170	42	%	$	1,898		$	1,624		$	274	17	%
Interest expense	53			66			41			76			93			(13)		(20)		(40)		(43)		235			414			(179)		(43)
Net interest income	522			532			305			303			311			(11)		(2)		210		68		1,662			1,210			452		37
Noninterest income:
Fixed income	104			111			112			96			81			(7)		(6)		23		28		423			279			144		52
Mortgage banking and title	57			66			4			2			4			(8)		(13)		54		NM		129			10			119		NM
Brokerage, trust, and insurance	31			30			22			23			22			2		5		9		41		107			87			20		23
Service charges and fees	53			50			35			36			39			3		5		14		36		174			153			21		14
Card and digital banking fees	18			17			12			12			14			2		11		5		35		59			50			9		19
Deferred compensation income	9			4			8			(10)			3			5		123		5		NM		11			11			—		(2)
Other noninterest income1	16			546			12			15			20			(530)		(97)		(4)		(22)		589			64			525		NM
Total noninterest income	288			823			206			175			183			(534)		(65)		105		57		1,492			654			838		128
Total revenue	810			1,355			512			478			495			(545)		(40)		315		64		3,155			1,864			1,291		69
Noninterest expense:
Personnel expense:
Salaries and benefits	200			201			111			113			112			(1)		—		88		79		625			454			171		38
Incentives and commissions	110			126			79			81			63			(15)		(12)		47		75		396			228			168		73
Deferred compensation expense	9			3			9			(10)			4			6		NM		5		132		11			13			(2)		(15)
Total personnel expense	319			329			200			183			179			(10)		(3)		141		79		1,033			695			338		49
Occupancy and equipment	76			77			46			44			44			—		(1)		32		73		243			175			68		39
Outside services	59			78			38			38			54			(19)		(24)		5		8		213			190			23		12
Amortization of intangible assets	15			15			5			5			6			—		—		8		136		40			25			15		61
Other noninterest expense	39			89			31			31			45			(50)		(56)		(6)		(14)		189			148			41		28
Total noninterest expense	508			587			321			302			328			(79)		(13)		180		55		1,718			1,233			485		39
Pre-provision net revenue2	302			768			191			175			166			(466)		(61)		136		82		1,436			631			805		128
Provision for credit losses3	1			227			121			154			9			(226)		(100)		(8)		(89)		503			45			458		NM
Income before income taxes	301			541			69			21			157			(240)		(44)		144		92		933			586			347		59
Provision for income taxes	56			2			13			5			36			54		NM		20		57		76			133			(57)		(43)
Net income	245			539			57			16			121			(294)		(55)		124		102		857			452			405		89
Net income attributable to noncontrolling interest	3			3			3			3			3			—		(5)		—		(3)		12			11			1		5
Net income attributable to controlling interest	242			536			54			14			118			(294)		(55)		124		104		845			441			404		92
Preferred stock dividends	8			13			2			2			2			(5)		(40)		6		NM		23			6			17		NM
Net income available to common shareholders	$	234		$	523		$	52		$	12		$	117		$	(289)	(55)	%	$	118	101	%	$	822		$	435		$	387	89	%
Common Share Data
EPS	$	0.42		$	0.95		$	0.17		$	0.04		$	0.38		$	(0.53)	(56)		$	0.04	11		$	1.90		$	1.39		$	0.51	37
Basic shares	553			550			312			312			311			3		1		242		78		432			314			118		38
Diluted EPS	$	0.42		$	0.95		$	0.17		$	0.04		$	0.37		$	(0.53)	(56)		$	0.05	14		$	1.89		$	1.38		$	0.51	37
Diluted shares	557			551			313			313			313			6		1		244		78		434			316			118		37

Effective tax rate	18.7		%	0.4		%	18.4		%	22.4		%	22.9		%									8.2		%	22.8		%

Numbers may not foot due to rounding.

See footnote disclosures on page 21.


ADJUSTED4 FINANCIAL DATA - SEE NOTABLE ITEMS ON PAGE 10
Quarterly, Unaudited


																4Q20 Change vs.
($s in millions, except per share data)	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20				4Q19				2020			2019			2020 vs. 2019
																$		%		$		%								$		%




Adjusted noninterest income:
Fixed income	$	104		$	111		$	112		$	96		$	81		$	(7)	(6)	%	$	23	28	%	$	423		$	279		$	144	52	%
Mortgage banking and title	57			66			4			2			4			(9)		(13)		53		NM		129			10			119		NM
Brokerage, trust, and insurance	31			30			22			23			22			1		5		9		43		107			87			20		23
Service charges and fees	53			50			35			36			39			3		6		14		36		174			153			21		14
Card and digital banking fees	18			17			12			12			14			1		8		4		31		59			50			10		19
Deferred compensation income	9			4			8			(10)			3			5		123		5		NM		11			11			—		(2)
Adjusted other noninterest income	15			14			12			15			20			1		7		(5)		(25)		56			64			(9)		(13)
Adjusted total noninterest income	$	288		$	291		$	206		$	175		$	183		$	(4)	(1)	%	$	105	57	%	$	960		$	654		$	305	47	%


Adjusted noninterest expense:
Adjusted personnel expense:
Adjusted salaries and benefits	$	200		$	200		$	107		$	112		$	107		$	—	—	%	$	93	87	%	$	619		$	449		$	170	38	%
Adjusted Incentives and commissions	89			91			79			81			63			(2)		(2)	%	26		42		341			219			121		55
Deferred compensation expense	9			3			9			(10)			4			6		NM		5		125		11			13			(2)		(15)
Adjusted total personnel expense	298			294			195			182			174			4		1	%	124		71		971			680			291		43
Adjusted occupancy and equipment	74			73			46			44			44			1		2	%	30		69		238			172			66		38
Adjusted outside services	52			46			33			37			36			6		13	%	16		44		166			143			23		16
Adjusted amortization of intangible assets	14			14			5			5			6			—		(2)	%	8		128		38			25			13		52
Adjusted other noninterest expense	35			45			27			28			31			(10)		(22)	%	4		13		136			98			38		39
Adjusted total noninterest expense	$	474		$	471		$	307		$	296		$	291		$	3	1	%	$	183	63	%	$	1,549		$	1,119		$	429	38	%

Adjusted pre-provision net revenue4	$	335		$	352		$	205		$	181		$	203		$	(17)	(5)	%	$	132	65	%	$	1,073		$	745		$	328	44	%

Adjusted provision for credit losses3	$	1		$	80		$	121		$	154		$	9		$	(79)	(99)	%	$	(8)	(89)	%	$	356		$	45		$	311	NM







Adjusted net income available to common shareholders	$	255		$	193		$	64		$	17		$	147		$	62	32	%	$	108	73	%	$	528		$	525		$	3	1	%

Adjusted Common Share Data


Adjusted diluted EPS	$	0.46		$	0.35		$	0.20		$	0.05		$	0.47		$	0.11	31	%	$	(0.01)	(2)	%	$	1.22		$	1.66		$	(0.45)	(27)	%
Diluted shares	557			551			313			313			313			6		1	%	244		78	%	434			316			118		37	%

Adjusted effective tax rate	20.7		%	23.3		%	18.3		%	22.2		%	22.2		%									21.5		%	22.5		%

Numbers may not foot due to rounding.

See footnote disclosures on page 21.


NOTABLE ITEMS
Quarterly and Year-end, Unaudited



(In millions)	4Q20		3Q20		2Q20		1Q20		4Q19		2020		2019
Summary of Notable Items:
Purchase accounting gain	$	1	$	532	$	—	$	—	$	—	$	533	$	—
Merger/acquisition non-PCD provision expense	—		(147)		—		—		—		(147)		—
Merger/acquisition expense*	(34)		(101)		(14)		(6)		(16)		(155)		(39)
Charitable contributions	—		(15)		—		—		(11)		(15)		(11)
Other notable expenses	—		—		—		—		(10)		—		(64)
Total notable items	$	(33)	$	269	$	(14)	$	(6)	$	(37)	$	216	$	(114)

Numbers may not foot due to rounding

•3Q20 includes $20 million of charitable contributions to establish the First Horizon Louisiana Foundation.


IMPACT OF NOTABLE ITEMS:
Quarterly and Year-end, Unaudited



(In millions)	4Q20		3Q20		2Q20		1Q20		4Q19		2020		2019
Impacts of Notable Items:



Noninterest income:






Other noninterest income	$	(1)	$	(532)	$	—	$	—	$	—	$	(533)	$	—
Total noninterest income	$	(1)	$	(532)	$	—	$	—	$	—	$	(533)	$	—


Noninterest expense:
Personnel expenses:
Salaries and benefits	$	—	$	(1)	$	(5)	$	(1)	$	(4)	$	(7)	$	(5)
Incentives and commissions	(21)		(34)		—		—		—		(55)		(10)
Deferred compensation expense	—		—		—		—		—		—		—
Total personnel expenses	(21)		(35)		(5)		(1)		(4)		(62)		(15)
Occupancy and equipment	(2)		(4)		—		—		—		(6)		(3)
Outside services	(7)		(32)		(5)		(2)		(18)		(46)		(48)
Amortization of intangible assets	(1)		(1)		—		—		—		(2)		—
Other noninterest expense	(4)		(44)		(4)		(3)		(15)		(54)		(49)
Total noninterest expense	$	(34)	$	(116)	$	(14)	$	(6)	$	(37)	$	(170)	$	(114)





Provision for credit losses	$	—	$	(147)	$	—	$	—	$	—	$	(147)	$	—

Income before income taxes	$	33	$	(269)	$	14	$	6	$	37	$	(216)	$	114
Provision for income taxes	13		61		3		1		7		78		24




Net income/(loss) available to common shareholders	$	20	$	(331)	$	12	$	5	$	30	$	(294)	$	90

Numbers may not foot due to rounding


FINANCIAL RATIOS
Quarterly and Year-end, Unaudited
																4Q20 change vs.															2020 vs. 2019
	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20				4Q19					2020			2019
FINANCIAL RATIOS																$/bp			%	$/bp			%								$/bp			%
Net interest margin	2.71		%	2.84		%	2.90		%	3.16		%	3.26		%	(13)		bp		(55)		bp			2.86		%	3.28		%	(42)		bp
Return on average assets	1.16		%	2.63		%	0.48		%	0.15		%	1.12		%	(147)				4					1.33		%	1.08		%	25
Adjusted return on average assets4	1.26		%	1.01		%	0.57		%	0.19		%	1.40		%	25				(14)					0.87		%	1.30		%	(43)
Return on average common equity (“ROCE”)	12.53		%	28.49		%	4.50		%	1.05		%	9.97		%	(1,596)				256					13.66		%	9.60		%	406

Return on average tangible common equity (“ROTCE”)4	16.73		%	37.75		%	6.74		%	1.59		%	15.03		%	(2,102)				170					19.03		%	14.71		%	432
Adjusted ROTCE4	18.18		%	13.90		%	8.26		%	2.19		%	18.88		%	428				(70)					12.15		%	17.60		%	(545)
Noninterest income as a % of total revenue	35.61		%	60.72		%	40.32		%	36.59		%	37.05		%	(2,511)				(144)					47.31		%	35.09		%	1,222
Adjusted noninterest income as a % of total revenue4	35.56		%	35.32		%	40.32		%	36.59		%	37.05		%	24				(149)					36.60		%	35.09		%	151
Efficiency ratio	62.71		%	43.31		%	62.74		%	63.26		%	66.35		%	1,940				(364)					54.47		%	66.15		%	(1,168)
Adjusted efficiency ratio4	58.57		%	57.26		%	59.95		%	62.05		%	58.88		%	131				(31)					59.06		%	60.02		%	(96)

CAPITAL - PERIOD END (PRELIMINARY)
CET1 capital ratio	9.67		%	9.21		%	9.25		%	8.54		%	9.20		%	46		bp		47		bp			9.67		%	9.20		%	47		bp
Tier 1 capital ratio	10.73		%	10.25		%	10.69		%	9.52		%	10.15		%	48		bp		58		bp			10.73		%	10.15		%	58		bp
Total capital ratio	12.55		%	12.05		%	12.47		%	10.78		%	11.22		%	50		bp		133		bp			12.55		%	11.22		%	133		bp
Tier 1 leverage ratio	8.24		%	8.25		%	8.55		%	9.00		%	9.04		%	(1)		bp		(80)		bp			8.24		%	9.04		%	(80)		bp
Risk-weighted assets (“RWA”) (billions)	$	63.2		$	64.5		$	37.4		$	40.1		$	37.0		$	(1)		(2)	$	26		71		$	63.2		$	37.0		$	26		70
Total equity to total assets	9.86		%	9.81		%	10.71		%	10.71		%	11.72		%	5		bp		(186)		bp			9.86		%	11.72		%	(186)		bp
Tangible common equity/tangible assets (“TCE/TA”)4	6.89		%	6.78		%	6.63		%	6.81		%	7.48		%	11		bp		(59)		bp			6.89		%	7.48		%	(59)		bp
Period-end shares outstanding (millions)	555			555			312			312			311			—			—	244			78		555			311			244			78
Cash dividends declared per common share	$	0.15		$	0.15		$	0.15		$	0.15		$	0.14		$	—		—	$	0.01		7		0.60			0.56			$	0.04		7
Book value per common share	$	13.59		$	13.30		$	14.96		$	14.96		$	15.04		$	0.29		2	$	(1.45)		(10)		$	13.59		$	15.04		$	(1.45)		(10)
Tangible book value per common share4	$	10.23		$	9.92		$	9.99		$	9.96		$	10.02		$	0.31		3	$	0.21		2		$	10.23		$	10.02		$	0.21		2


SELECTED BALANCE SHEET DATA
Loans-to-deposit ratio (period-end balances)	83.21		%	87.28		%	86.62		%	96.97		%	95.78		%	(407)		bp		(1,257)		bp			83.21		%	95.78		%	(1,257)		bp
Loans-to-deposit ratio (average balances)	85.90		%	89.59		%	90.52		%	92.83		%	93.68		%	(369)		bp		(778)		bp			89.02		%	90.08		%	(106)		bp
Full-time equivalent associates	8,466			8,121			5,006			4,969			5,005			345			4	3,461			69	%	6,649			5,231			1,418			27

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

See footnote disclosures on page 21.

CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited


											4Q20 change vs.
(In millions)	4Q20		3Q20		2Q20		1Q20		4Q19		3Q20				4Q19
											$		%		$		%
Assets:
Loans and leases:
Commercial, financial, and industrial (C&I)	$	33,103	$	33,656	$	21,394	$	22,124	$	20,051	$	(552)	(2)	%	$	13,052	65	%
Commercial real estate	12,275		12,511		4,813		4,640		4,337		(236)		(2)		7,938		NM
Total Commercial	45,379		46,167		26,207		26,764		24,388		(788)		(2)		20,991		86
Consumer real estate	11,725		12,328		6,052		6,119		6,177		(603)		(5)		5,548		90
Credit card and other5	1,128		1,212		449		495		496		(84)		(7)		632		128
Total Consumer	12,853		13,540		6,502		6,614		6,673		(687)		(5)		6,180		93
Loans and leases, net of unearned income	58,232		59,707		32,709		33,378		31,061		(1,475)		(2)		27,171		87
Loans held for sale	1,022		1,051		746		596		594		(29)		(3)		428		72
Investment securities	8,057		8,006		5,486		4,555		4,455		51		1		3,602		81
Trading securities	1,176		1,386		1,116		1,878		1,346		(210)		(15)		(170)		(13)
Interest-bearing deposits with banks	8,351		5,443		3,136		671		482		2,908		53		7,869		NM
Federal funds sold and securities purchased under agreements to resell	445		593		415		592		633		(148)		(25)		(188)		(30)
Total interest earning assets	77,284		76,186		43,608		41,669		38,572		1,098		1		38,712		100
Cash and due from banks	1,203		1,075		604		538		634		129		12		569		90
Goodwill and other intangible assets, net	1,864		1,876		1,552		1,558		1,563		(12)		(1)		301		19
Premises and equipment, net	759		756		448		448		455		3		—		304		67
Allowance for loan and lease losses6	(963)		(988)		(538)		(444)		(200)		25		3		(763)		NM
Other assets	4,063		4,125		2,970		3,429		2,287		(62)		(2)		1,776		78
Total assets	$	84,209	$	83,030	$	48,645	$	47,197	$	43,311	$	1,180	1	%	$	40,899	94	%

Liabilities and Shareholders' Equity:
Deposits:
Savings	$	27,324	$	26,573	$	13,532	$	13,860	$	11,665	$	751	3	%	$	15,659	134	%
Time deposits	5,070		5,526		2,656		3,058		3,618		(455)		(8)		1,452		40
Other interest-bearing deposits	15,415		14,925		9,784		8,561		8,717		490		3		6,698		77
Total interest-bearing deposits	47,810		47,025		25,972		25,480		24,001		785		2		23,809		99
Trading liabilities	353		477		233		453		506		(124)		(26)		(153)		(30)
Short-term borrowings	2,198		2,142		2,392		5,325		3,518		57		3		(1,320)		(38)
Term borrowings	1,670		2,162		2,032		793		791		(492)		(23)		878		111
Total interest-bearing liabilities	52,030		51,805		30,628		32,050		28,816		225		—		23,215		81
Noninterest-bearing deposits	22,173		21,384		11,788		8,940		8,429		788		4		13,744		NM
Other liabilities	1,699		1,696		1,020		1,152		990		4		—		709		72
Total liabilities	75,903		74,885		43,436		42,142		38,235		1,017		1		37,668		99
Shareholders' Equity:
Preferred stocks	470		470		240		96		96		—		—		375		NM
Common stocks	347		347		195		195		195		—		—		152		78
Capital surplus	5,073		5,061		2,941		2,939		2,931		12		—		2,142		73
Retained earnings6	2,261		2,111		1,672		1,667		1,798		150		7		463		26
Accumulated other comprehensive loss, net	(140)		(140)		(135)		(136)		(240)		—		—		100		42
Combined shareholders' equity	8,012		7,849		4,913		4,760		4,781		163		2		3,231		68
Noncontrolling interest	295		295		295		295		295		—		—		—		—
Total shareholders' equity	8,307		8,144		5,208		5,056		5,076		163		2		3,231		64
Total liabilities and shareholders' equity	$	84,209	$	83,030	$	48,645	$	47,197	$	43,311	$	1,180	1	%	$	40,899	94	%
Memo:
Total Deposits	$	69,982	$	68,409	$	37,759	$	34,420	$	32,430	$	1,573	2	%	$	37,553	116	%

Numbers may not foot due to rounding. Certain previously reported amounts have been reclassified to agree with current presentation. See footnote disclosures on page 21.

CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly and Year-end, Unaudited


											4Q20 change vs.												2020 vs. 2019
(In millions)	4Q20		3Q20		2Q20		1Q20		4Q19		3Q20				4Q19				2020		2019
											$		%		$		%						$		%
Assets:
Loans and leases:
Commercial, financial, and industrial (C&I)	$	34,196	$	34,051	$	22,694	$	19,470	$	19,740	$	145	—	%	$	14,456	73	%	$	27,655	$	18,283	$	9,372	51	%
Commercial real estate	12,400		12,414		4,710		4,422		4,264		(14)		—		8,136		NM		8,491		4,102		4,389		107
Total Commercial	46,596		46,465		27,404		23,891		24,004		131		—		22,592		94		36,146		22,385		13,761		61
Consumer real estate	12,030		12,444		6,087		6,134		6,194		(413)		(3)		5,836		94		9,191		6,103		3,088		51
Credit card and other5	1,194		1,209		476		498		509		(15)		(1)		685		135		846		701		145		21
Total Consumer	13,224		13,653		6,564		6,633		6,703		(429)		(3)		6,521		97		10,037		6,804		3,233		48
Loans and leases, net of unearned income	59,820		60,118		33,968		30,524		30,706		(298)		—		29,113		95		46,183		29,189		16,994		58
Loans held-for-sale	1,030		985		731		590		582		45		5		448		77		835		578		257		44
Investment securities	8,213		8,590		4,541		4,467		4,448		(377)		(4)		3,765		85		6,464		4,510		1,954		43
Trading securities	1,292		1,194		1,420		1,831		1,264		98		8		28		2		1,433		1,415		18		1
Interest-bearing deposits with banks	6,201		3,616		1,620		548		586		2,585		71		5,614		NM		3,006		871		2,135		NM
Federal funds sold and securities purchased under agreements to resell	440		500		422		827		656		(60)		(12)		(216)		(33)		547		603		(56)		(9)
Total interest earning assets	76,995		75,002		42,702		38,788		38,242		1,993		3		38,753		101		58,468		37,165		21,303		57
Cash and due from banks	1,204		1,028		562		610		610		177		17		594		97		852		602		250		42
Goodwill and other intangibles assets, net	1,871		1,794		1,555		1,560		1,566		77		4		305		19		1,696		1,575		121		8
Premises and equipment, net	765		747		452		451		451		18		2		314		70		604		467		137		29
Allowances for loan and lease losses6	(985)		(980)		(476)		(354)		(196)		(5)		(1)		(789)		NM		(700)		(191)		(509)		NM
Other assets	3,959		4,093		3,140		2,497		2,213		(134)		(3)		1,746		79		3,426		2,126		1,300		61
Total assets	$	83,809	$	81,683	$	47,934	$	43,552	$	42,886	$	2,126	3	%	$	40,923	95	%	$	64,346	$	41,744	$	22,602	54	%

Liabilities and shareholders' equity:
Deposits:
Savings	$	27,090	$	25,648	$	14,118	$	12,117	$	11,580	$	1,442	6	%	$	15,510	134	%	$	19,780	$	11,663	$	8,117	70	%
Time deposits	5,386		5,783		2,836		3,357		3,934		(396)		(7)		1,453		37		4,347		4,262		85		2
Other interest-bearing deposits	15,057		14,771		9,256		8,743		8,721		286		2		6,336		73		11,973		8,345		3,628		43
Total interest-bearing deposits	47,534		46,202		26,211		24,216		24,235		1,332		3		23,299		96		36,100		24,270		11,830		49
Trading liabilities	367		360		352		751		586		7		2		(219)		(37)		457		503		(46)		(9)
Short-term borrowings	2,113		2,469		2,603		3,211		2,709		(356)		(14)		(596)		(22)		2,597		1,977		620		31
Term borrowings	1,913		2,172		1,426		791		928		(259)		(12)		984		106		1,578		1,117		461		41
Total interest-bearing liabilities	51,926		51,202		30,593		28,967		28,458		724		1		23,468		82		40,732		27,868		12,864		46
Noninterest-bearing deposits	22,105		20,904		11,316		8,666		8,543		1,202		6		13,563		NM		15,779		8,133		7,646		94
Other liabilities	1,568		1,505		908		915		845		63		4		723		86		1,226		823		403		49
Total liabilities	75,600		73,611		42,816		38,550		37,846		1,989		3		37,754		100		57,737		36,823		20,914		57
Shareholders' Equity:
Preferred stock	470		468		150		96		96		2		1		375		NM		297		96		201		NM
Common stock	347		345		195		195		195		2		—		152		78		271		196		75		38
Capital surplus	5,902		5,041		2,941		2,935		2,928		861		17		2,973		102		4,215		2,960		1,255		42
Retained earnings6	1,346		2,025		1,672		1,687		1,766		(679)		(34)		(420)		(24)		1,679		1,666		13		1
Accumulated other comprehensive loss, net	(151)		(103)		(135)		(206)		(240)		(48)		(47)		90		37		(149)		(293)		144		49
Combined shareholders' equity	7,914		7,777		4,822		4,707		4,744		137		2		3,170		67		6,313		4,625		1,688		36
Noncontrolling interest	295		295		295		295		295		—		—		—		—		295		295		—		—
Total shareholders' equity	8,209		8,072		5,118		5,002		5,040		137		2		3,170		63		6,609		4,921		1,688		34
Total liabilities and shareholders' equity	$	83,809	$	81,683	$	47,934	$	43,552	$	42,886	$	2,126	3	%	$	40,923	95	%	$	64,346	$	41,744	$	22,602	54	%
Memo:
Total Deposits	$	69,639	$	67,106	$	37,526	$	32,882	$	32,777	$	2,533	4	%	$	36,862	112	%	$	51,879	$	32,403	$	19,476	60	%

Numbers may not foot due to rounding. Certain previously reported amounts have been reclassified to agree with current presentation. See footnote disclosures on page 21.


CONSOLIDATED NET INTEREST INCOME AND AVERAGE BALANCE SHEET: YIELDS AND RATES
Quarterly and Year-end, Unaudited
																4Q20 change vs.														2020 vs. 2019
	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20				4Q19				2020			2019
(In millions, except rates)	Income/Expense		Rate	Income/Expense		Rate	Income/Expense		Rate	Income/Expense		Rate	Income/Expense		Rate	Income/Expense				Income/Expense				Income/Expense		Rate	Income/Expense		Rate	Income/Expense
																$		%		$		%								$		%
Interest earning assets/Interest income:
Loans and leases, net of unearned income:
Commercial	$	406	3.46	$	419	3.59	$	243	3.56	$	257	4.33	$	280	4.63	$	(13)	(3)	%	$	125	45	%	$	1,324	3.66	$	1,091	4.87	$	233	21	%
Consumer	129		3.89	141		4.11	65		4.00	71		4.33	76		4.51	(12)		(9)		53		69		406		4.05	311		4.57	95		31
Loans and leases, net of unearned income	535		3.56	560		3.70	308		3.65	329		4.33	356		4.60	(25)		(4)		179		50		1,731		3.75	1,402		4.80	329		23
Loans held-for-sale	8		3.22	8		3.36	7		3.61	7		4.67	7		4.85	—		4		1		19		30		3.60	31		5.39	(1)		(2)
Investment securities	27		1.29	25		1.21	25		2.23	28		2.51	29		2.60	2		8		(2)		(7)		105		1.64	121		2.69	(16)		(13)
Trading securities	7		2.05	6		2.08	9		2.48	13		2.91	10		3.01	1		10		(3)		(34)		35		2.44	47		3.33	(12)		(26)
Interest-bearing deposits with banks	2		0.10	1		0.09	—		0.09	2		1.13	2		1.60	1		55		—		(22)		5		0.14	19		2.18	(14)		(76)
Federal funds sold and securities purchased under agreements	—		0.03	—		0.04	—		(0.06)	2		1.13	3		1.52	—		NM		(3)		(99)		2		0.43	12		2.02	(10)		(83)
Interest income	$	578	2.99	$	601	3.19	$	349	3.29	$	381	3.94	$	407	4.22	$	(23)	(4)	%	$	171	42	%	$	1,909	3.26	1,633		4.39	$	276	17	%

Interest bearing liabilities/Interest expense:
Interest-bearing deposits:
Savings	$	18	0.27	$	25	0.38	$	13	0.36	$	26	0.87	$	30	1.04	$	(7)	(28)	%	$	(12)	(40)	%	$	82	0.41	$	144	1.24	$	(62)	(43)	%
Time deposits	6		0.44	10		0.70	9		1.31	14		1.67	19		1.94	(4)		(41)		(13)		(69)		39		0.90	84		1.97	(45)		(54)
Other interest-bearing deposits	7		0.18	7		0.20	3		0.13	14		0.65	18		0.81	—		(2)		(11)		(62)		31		0.26	79		0.94	(48)		(61)
Total interest-bearing deposits	31		0.26	42		0.36	25		0.38	54		0.90	67		1.10	(11)		(26)		(36)		(54)		152		0.42	307		1.27	(155)		(51)
Trading liabilities	1		0.78	1		0.77	1		1.11	3		1.76	3		2.02	—		2		(2)		(76)		6		1.24	13		2.48	(7)		(56)
Short-term borrowings	1		0.23	1		0.20	1		0.22	10		1.24	12		1.74	—		22		(11)		(90)		14		0.53	41		2.08	(27)		(65)
Term borrowings	20		4.16	22		3.98	14		3.96	8		4.01	10		4.52	(2)		(10)		10		99		64		4.02	53		4.77	11		21
Interest expense	53		0.40	66		0.51	41		0.54	76		1.05	93		1.29	(13)		(20)		(40)		(43)		236		0.58	414		1.49	(178)		(43)
Net interest income - tax equivalent basis	525		2.59	535		2.68	308		2.75	305		2.89	314		2.93	(10)		(2)		211		67		1,673		2.68	1,219		2.90	454		37
Fully taxable equivalent adjustment	(3)		0.12	(3)		0.16	(3)		0.15	(2)		0.27	(2)		0.33	—		(7)		(1)		(60)		(11)		0.18	(9)		0.38	(2)		(24)
Net interest income	$	522	2.71	$	532	2.84	$	305	2.90	$	303	3.16	$	311	3.26	$	(10)	(2)	%	$	211	68	%	$	1,662	2.86	$	1,210	3.28	$	452	37	%

Net interest income and yields are adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 21 percent and, where applicable, state income taxes.

Earning assets yields are expressed net of unearned income.

Loan yields include loan fees, cash basis interest income, and loans on nonaccrual status.

Numbers may not foot due to rounding.

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

See footnote disclosures on page 21.


CONSOLIDATED NONPERFORMING LOANS AND LEASES ("NPL")
Quarterly, Unaudited

	As of															4Q20 change vs.
(In millions, except ratio data)	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20				4Q19
																$		%		$		%
Nonperforming loans and leases
Commercial, financial, and industrial (C&I)	$	144		$	213		$	127		$	96		$	74		$	(69)	(33)	%	$	69	93	%
Commercial real estate	58			51			2			2			2			7		14		57		NM
Consumer real estate	182			180			96			91			86			2		1		97		113
Credit card and other	2			3			—			—			—			(1)		(30)		2		NM
Total nonperforming loans and leases	$	386		$	447		$	226		$	190		$	162		$	(60)	(14)	%	$	224	138	%

Asset Quality Ratio
Nonperforming loans and leases to loans and leases
Commercial, financial, and industrial (C&I)	0.43		%	0.63		%	0.60		%	0.43		%	0.37		%
Commercial real estate	0.48			0.41			0.04			0.05			0.04
Consumer real estate	1.56			1.46			1.59			1.49			1.39
Credit card and other	0.18			0.24			0.06			0.07			0.07
Total nonperforming loans and leases to loans and leases	0.66		%	0.75		%	0.69		%	0.57		%	0.52		%

Numbers may not foot due to rounding.


CONSOLIDATED LOANS AND LEASES 90 DAYS OR MORE PAST DUE AND ACCRUING
Quarterly, Unaudited

	As of										4Q20 change vs.
(In millions)	4Q20		3Q20		2Q20		1Q20		4Q19		3Q20				4Q19
											$		%		$		%
Loans and leases 90 days or more past due and accruing
Commercial, financial, and industrial (C&I)	$	—	$	—	$	—	$	—	$	2	$	—	77	%	$	(2)	(87)	%
Commercial real estate	—		—		—		—		—		—		NM		—		NM
Consumer real estate	15		14		13		12		18		2		14		(3)		(15)
Credit card and other	1		1		1		2		2		—		(23)		(1)		(56)
Total loans and leases 90 days or more past due and accruing	$	16	$	15	$	14	$	14	$	22	$	2	12	%	$	(6)	(25)	%

Numbers may not foot due to rounding.


CONSOLIDATED NET CHARGE-OFFS
Quarterly, Unaudited

	As of															4Q20 change vs.
(In millions, except ratio data)	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20				4Q19
Charge-off, Recoveries and Related Ratios																$		%		$		%
Gross Charge-offs
Commercial, financial, and industrial (C&I)	$	35		$	69		$	18		$	7		$	5		$	(34)	(50)	%	$	30	NM
Commercial real estate	—			4			—			1			—			(3)		(89)		—		58
Consumer real estate	1			2			2			2			2			—		(18)		(1)		(32)
Credit card and other	4			4			3			4			4			—		—		—		(5)
Total gross charge-offs	$	40		$	78		$	23		$	13		$	12		$	(38)	(48)	%	$	29	NM
Gross Recoveries
Commercial, financial, and industrial (C&I)	$	(4)		$	(3)		$	(1)		$	(1)		$	(2)		$	(1)	(25)	%	$	(2)	(86)	%
Commercial real estate	(1)			(2)			—			(1)			—			1		53		(1)		NM
Consumer real estate	(5)			(5)			(4)			(4)			(6)			—		4		—		7
Credit card and other	(1)			(1)			(1)			(1)			(1)			—		(47)		(1)		(87)
Total gross recoveries	$	(12)		$	(12)		$	(6)		$	(6)		$	(9)		$	—	1	%	$	(3)	(32)	%
Net Charge-offs (Recoveries)
Commercial, financial, and industrial (C&I)	$	31		$	66		$	17		$	6		$	3		$	(35)	(53)	%	$	28	NM
Commercial real estate	(1)			1			—			—			—			(2)		NM		(1)		NM
Consumer real estate	(4)			(3)			(2)			(1)			(3)			—		(4)		—		(9)
Credit card and other	2			3			2			3			3			—		(19)		(1)		(30)
Total net charge-offs	$	29		$	67		$	17		$	7		$	3		$	(38)	(57)	%	$	26	NM

Annualized Net Charge-off (Recovery) Rates
Commercial, financial, and industrial (C&I)	0.36		%	0.77		%	0.30		%	0.12		%	0.07		%
Commercial real estate	(0.02)			0.04			(0.01)			—			(0.01)
Consumer real estate	(0.12)			(0.11)			(0.13)			(0.08)			(0.21)
Credit card and other	0.68			0.83			1.35			2.12			2.29
Total loans and leases	0.19		%	0.44		%	0.20		%	0.10		%	0.04		%

Numbers may not foot due to rounding.


CONSOLIDATED ALLOWANCE FOR LOAN AND LEASE LOSSES AND RESERVE FOR UNFUNDED COMMITMENTS
Quarterly, Unaudited

	As of										4Q20 Change vs.
(In millions)	4Q20		3Q20		2Q20		1Q20		4Q19		3Q20				4Q19
Summary of Changes in the Components of the Allowance For Credit Losses											$		%		$		%
Allowance for loan and lease losses - beginning	$	988	$	538	$	444	$	200	$	193	$	450	84	%	$	795	NM
Cumulative effect of change in accounting principle:
Commercial, financial, and industrial (C&I)	—		—		—		19		—		—		NM		—		NM
Commercial real estate	—		—		—		(7)		—		—		NM		—		NM
Consumer real estate	—		—		—		93		—		—		NM		—		NM
Credit card and other	—		—		—		2		—		—		NM		—		NM
Total cumulative effect of change in accounting principles	—		—		—		106		—		—		NM		—		NM
Allowance for loan and lease losses - beginning, adjusted	$	988	$	538	$	444	$	307	$	193	$	450	84	%	$	795	NM
Acquired purchased credit deteriorated allowance for loan and lease losses:
Commercial, financial, and industrial (C&I)	—		138		—		—		—		(138)		(100)		—		NM
Commercial real estate	—		100		—		—		—		(100)		(100)		—		NM
Consumer real estate	—		44		—		—		—		(44)		(100)		—		NM
Credit card and other	—		5		—		—		—		(5)		(100)		—		NM
Total acquired purchased credit deteriorated allowance for loan and lease losses	—		287		—		—		—		(287)		(100)		—		NM
Charge-offs:
Commercial, financial, and industrial (C&I)	(35)		(69)		(18)		(7)		(5)		34		50		(30)		NM
Commercial real estate	—		(4)		—		(1)		—		3		89		—		(58)
Consumer real estate	(1)		(2)		(2)		(2)		(2)		—		18		1		32
Credit card and other	(4)		(4)		(3)		(4)		(4)		—		—		—		5
Total charge-offs	(40)		(78)		(23)		(13)		(12)		38		48		(29)		NM
Recoveries:
Commercial, financial, and industrial (C&I)	4		3		1		1		2		1		25		2		86
Commercial real estate	1		2		—		1		—		(1)		(53)		1		NM
Consumer real estate	5		5		4		4		6		—		(4)		—		(7)
Credit card and other	1		1		1		1		1		—		47		1		87
Total Recoveries	12		12		6		6		9		—		(1)		3		32
Provision for loan and lease losses:
Commercial, financial, and industrial (C&I)*	(5)		99		81		119		12		(104)		(106)		(17)		(147)
Commercial real estate*	34		52		10		19		—		(18)		(35)		33		NM
Consumer real estate*	(27)		74		19		—		(6)		(101)		(136)		(21)		NM
Credit card and other*	3		5		—		7		3		(2)		(46)		(1)		(20)
Total provision for loan and lease losses*:	4		230		110		145		10		(226)		(98)		(6)		(60)
Allowance for loan and lease losses - ending	$	963	$	988	$	538	$	444	$	200	$	(25)	(3)	%	$	763	NM

Reserve for unfunded commitments - beginning	$	89	$	50	$	39	$	6	$	7	$	38	76	%	$	82	NM
Cumulative effect of change in accounting principle	—		—		—		24		—		—		NM		—		NM
Acquired reserve for unfunded commitments	(1)		41		—		—		—		(42)		(103)		(1)		NM
Provision for unfunded commitments	(3)		(3)		11		9		(1)		—		—		(2)		NM
Reserve for unfunded commitments - ending	$	85	$	89	$	50	$	39	$	6	$	(4)	(5)		$	78	NM
Total allowance for credit losses- ending	$	1,048	$	1,077	$	588	$	484	$	206	$	(29)	(3)	%	$	841	NM

Numbers may not foot due to rounding. * 3Q20 includes $30 million, $44 million, $70 million, and $3 million recognized within the C&I, Commercial real estate, Consumer real estate, and Credit card and other loan and leases portfolios, respectively, of provision expense associated with the recognition of Non-PCD provision related to mergers/acquisitions.


CONSOLIDATED ASSET QUALITY RATIOS - ALLOWANCE FOR LOAN AND LEASE LOSSES
Quarterly, Unaudited

	As of
	4Q20		3Q20		2Q20		1Q20		4Q19

Allowance for loans and lease losses to loans and leases
Commercial, financial, and industrial (C&I)	1.37	%	1.45	%	1.49	%	1.15	%	0.61	%
Commercial real estate	1.97	%	1.66	%	1.19	%	1.03	%	0.83	%
Consumer real estate	2.07	%	2.15	%	2.38	%	2.01	%	0.46	%
Credit card and other	2.34	%	2.11	%	4.03	%	3.91	%	2.68	%
Total allowance for loans and lease losses to loans and leases	1.65	%	1.65	%	1.64	%	1.33	%	0.64	%
Allowance for loans and lease losses to nonperforming loans and leases
Commercial, financial, and industrial (C&I)	315	%	230	%	250	%	265	%	165	%
Commercial real estate	415	%	407	%	2,771	%	2,175	%	1,979	%
Consumer real estate	133	%	147	%	149	%	135	%	33	%
Credit card and other	1,313	%	890	%	7,114	%	5,368	%	3,975	%
Total allowance for loans and lease losses to nonperforming loans and leases	249	%	221	%	238	%	234	%	124	%

REGIONAL BANKING

Quarterly and Year-end, Unaudited


																4Q20 Change vs.																2020 vs. 2019
	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20					4Q19					2020			2019
																$/bp			%		$/bp			%								$/bp			%
Income Statement (millions)
Net interest income	$	432		$	445		$	227		$	203		$	178		$	(13)		(3)	%	$	254		143	%	$	1,307		$	773		$	534		69	%
Noninterest income	105			97			69			73			76			8			8		29			38	%	344			289			55			19
Total revenue	536			542			296			276			254			(6)			(1)		282			111	%	1,651			1,062			589			55
Noninterest expense	297			287			156			160			159			10			3		138			87	%	901			626			275			44
Pre-provision net revenue2	239			255			140			116			95			(16)			(6)		144			NM		750			436			314			72
Provision for credit losses3	(2)			194			102			98			5			(196)			(101)		(7)			(140)	%	392			24			368			NM
Income before income tax expense	242			61			37			19			91			181			NM		151			NM		358			412			(54)			(13)
Income tax expense	56			12			7			3			20			44			NM		36			NM		77			94			(17)			(18)
Net income	$	186		$	49		$	30		$	16		$	71		$	137		NM		$	115		NM		$	281		$	318		$	(37)		(12)	%

Average Balances (billions)
Total loans and leases	$	40.6		$	41.7		$	19.1		$	17.2		$	16.7		$	(1.1)		(3)	%	$	23.9		143	%	$	29.7		$	16.3		$	13.4		82	%
Interest-earning assets	40.6			41.6			19.1			17.2			16.7			(1.0)			(2)		23.9			143		29.7			16.3			13.4			82
Total assets	43.1			43.8			21.0			19.1			18.6			(0.7)			(2)		24.5			132		31.8			18.3			13.5			74
Total deposits	60.7			59.5			30.2			27.2			27.0			1.2			2		33.7			125		44.5			26.8			17.7			66

Key Metrics
Net interest margin7	4.25		%	4.28		%	4.83		%	4.79		%	4.30		%	(3)		bp			(5)		bp			4.43		%	4.79		%	(36)		bp
Efficiency ratio	55.39		%	52.97		%	52.79		%	57.96		%	62.41		%	242		bp			(702)		bp			54.56%			58.92%			(436)		bp
Loans-to-deposits ratio (period-end balances)	65.37		%	68.14		%	62.34		%	64.39		%	61.76		%	(277)		bp			361		bp			65.37%			61.76%			361		bp
Loans-to-deposits ratio (average-end balances)	66.91		%	70.06		%	63.12		%	63.24		%	61.59		%	(315)		bp			532		bp			66.77%			60.63%			614		bp
Return on average assets (annualized)	1.72		%	0.45		%	0.58		%	0.34		%	1.50		%	127		bp			22		bp			0.88%			1.74%			(86)		bp
Return on allocated equity8	18.37		%	5.14		%	6.32		%	3.41		%	14.77		%	1,323		bp			360		bp			9.65%			16.85%			(720)		bp
Financial center locations	492			493			269			269			269			(1)			—	%	223			83	%

Numbers may not add to total due to rounding.

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

See footnote disclosures on page 21.

Regional Banking segment: Offers financial products and services, including traditional lending and deposit taking, to consumer and commercial customers primarily in the southern and southeastern U.S. and other selected markets. Regional Banking also provides investment, wealth management, financial planning, trust and asset management services for consumer customers.

SPECIALTY BANKING

Quarterly and Year-end, Unaudited


																4Q20 Change vs.																2020 vs. 2019
	4Q20			3Q20			2Q20			1Q20			4Q19			3Q20					4Q19					2020			2019
																$/bp			%		$/bp			%								$/bp			%
Income Statement (millions)
Net interest income	$	177		$	163		$	136		$	107		$	138		$	14		8	%	$	39		28	%	$	583		$	444		$	139		31	%
Noninterest income	167			181			124			105			94			(14)			(8)		73			78		576			318			258			81
Total revenue	344			344			259			212			232			(1)			—		112			48		1,159			762			397			52
Noninterest expense	134			138			111			108			95			(4)			(3)		40			42		491			351			140			40
Pre-provision net revenue2	209			207			149			104			137			3			1		73			53		668			410			258			63
Provision for credit losses3	11			34			18			54			10			(24)			(69)		1			10		117			37			80			NM
Income before income tax expense	199			172			131			49			127			26			15		72			56		551			373			179			48
Income tax expense	48			42			32			12			31			6			15		17			56		134			91			43			47
Net income	$	150		$	130		$	99		$	37		$	96		$	20		15	%	$	55		57	%	$	417		$	281		$	136		48	%

Average Balances (billions)
Total loans and leases	$	18.2		$	17.4		$	14.0		$	12.4		$	13.1		$	0.8		5	%	$	5.2		40	%	$	15.5		$	11.8		$	3.7		31	%
Interest-earning assets	21.1			20.2			16.7			15.7			15.7			0.9			5		5.4			35		18.4			14.4			4.0			28
Total assets	22.3			21.6			18.0			16.9			16.8			0.7			3		5.5			33		19.7			15.5			4.2			27
Total deposits	4.9			4.4			3.6			3.4			3.4			0.5			12		1.6			46		4.1			3.2			0.9			29

Key Metrics
Fixed income product average daily revenue (thousands)	$	1,505		$	1,545		$	1,592		$	1,264		$	1,061		$	(40)		(3)	%	$	444		42	%	$	1,477		$	914		$	563		62	%
Net interest margin7	3.34		%	3.23		%	3.26		%	2.75		%	3.49		%	11		bp			(15)		bp			3.17		%	3.08		%	9		bp
Efficiency ratio	39.07		%	40.00		%	42.72		%	51.05		%	40.91		%	(93)		bp			(184)		bp			42.36%			46.14%			(378)		bp
Loans-to-deposits ratio (period-end balances)	365		%	399		%	375		%	468		%	408		%	(3,422)		bp			(4,315)		bp			365%			408%			(4,315)		bp
Loans-to-deposits ratio (average-end balances)	370		%	395		%	393		%	368		%	388		%	(2,524)		bp			(1,841)		bp			381%			374%			711		bp
Return on average assets (annualized)	2.69		%	2.40		%	2.20		%	0.89		%	2.26		%	29		bp			43		bp			2.11%			1.81%			30		bp
Return on allocated equity8	36.07		%	31.53		%	28.49		%	11.18		%	28.26		%	454		bp			781		bp			27.58%			21.84%			574		bp

Numbers may not add to total due to rounding.

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

See footnote disclosures on page 21.

Specialty Banking segment: Consists of lines of business that deliver product offerings and services with specialized industry knowledge. Specialty Banking’s lines of business include asset-based lending, mortgage warehouse lending, commercial real estate, franchise finance, correspondent banking, equipment finance, mortgage, and title insurance. In addition to traditional lending and deposit taking, Specialty Banking also delivers treasury management solutions, loan syndications, international banking and SBA lending. Additionally, Specialty Banking has a line of business focused on fixed income securities sales, trading, underwriting, and strategies for institutional clients in the U.S. and abroad, as well as loan sales, portfolio advisory services, and derivative sales.

CORPORATE

Quarterly and Year-end, Unaudited


											4Q20 Change vs.												2020 vs. 2019
	4Q20		3Q20		2Q20		1Q20		4Q19		3Q20				4Q19				2020		2019
											$		%		$		%						$/bp		%
Income Statement (millions)
Net interest income/(expense)	$	(87)	$	(76)	$	(57)	$	(8)	$	(5)	$	(10)	(13)	%	$	(82)	NM		$	(228)	$	(7)	$	(221)	NM
Noninterest income1	17		545		14		(3)		13		(528)		(97)		3		25		573		47		525		NM
Total revenues	(70)		469		(43)		(11)		9		(538)		(115)		(79)		NM		345		40		304		NM
Noninterest expense	77		162		54		34		75		(85)		(53)		2		3		327		256		71		28	%
Pre-provision net revenue2	(147)		307		(98)		(44)		(66)		(454)		(148)		(81)		(122)		18		(216)		234		108
Provision for credit losses3	(7)		(1)		1		2		(5)		(6)		NM		(2)		(40)		(6)		(16)		11		65
Income before income tax expense	(139)		308		(98)		(47)		(61)		(448)		(145)		(78)		(129)		24		(199)		223		112
Income tax expense (benefit)	(48)		(52)		(26)		(10)		(16)		4		8		(32)		NM		(135)		(52)		(83)		NM
Net income/(loss)	$	(92)	$	360	$	(72)	$	(37)	$	(45)	$	(451)	(125)	%	$	(46)	(103)	%	$	159	$	(147)	$	306	NM

Average Balance Sheet (billions)
Interest bearing assets	$	15.3	$	13.2	$	6.9	$	5.9	$	5.9	$	2.1	16	%	$	9.4	NM		$	10.3	$	6.4	$	3.9	60	%
Total assets	18.4		16.3		8.9		7.6		7.4		2.1		13		11.0		148	%	12.8		8.0		4.8		61

Numbers may not foot due to rounding.

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

See footnote disclosures on page 21.

Corporate segment: Consists primarily of corporate support functions including risk management, audit, accounting, finance, executive office, and corporate communications. Shared support services such as human resources, properties, technology, credit risk and bank operations are allocated to the activities of Regional Banking, Specialty Banking, and Corporate. Additionally, the Corporate segment includes centralized management of capital and funding to support the business activities of the company including management of wholesale funding, liquidity, and capital management and allocation. Finally, the Corporate segment includes the revenue and expense associated with run-off businesses such as pre-2009 mortgage banking elements, run-off consumer and trust preferred loan portfolios, and other exited businesses.

FOOTNOTES

1 3Q20 includes a $532 million purchase accounting gain from FHN's merger with IBERIABANK.

2 Pre-provision net revenue is a non-GAAP measure and is reconciled to income before income taxes (GAAP) in the table.

3 Beginning in 3Q20 FHN began recording credit expense on unfunded commitments as a component of provision for credit losses. Prior period amounts have been reclassified from other noninterest expense.

4 Represents a non-GAAP measure and is reconciled to the nearest GAAP measure in the non-GAAP to GAAP reconciliations beginning on page 22.

5 Credit card and other includes an insignificant amount of commercial credit card balances.

6 Effective 1/1/2020 FHN adopted ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," (CECL) which resulted in an increase to the Allowance for loan and lease losses of $106 million and a net decrease to retained earnings of $96 million.

7 Net interest margin is computed using total NII adjusted for FTE assuming a statutory federal income tax rate of 21 percent, and, where applicable state taxes.

8 Segment equity is allocated based on an internal allocation methodology.


CONSOLIDATED NON-GAAP TO GAAP RECONCILIATION
Quarterly and Year-end, Unaudited


($s in millions, except per share data)	4Q20			3Q20			2Q20			1Q20			4Q19			2020			2019

Tangible Common Equity (Non-GAAP)
(A) Total equity (GAAP)	$	8,307		$	8,144		$	5,208		$	5,056		$	5,076		$	8,307		$	5,076
Less: Noncontrolling interest (a)	295			295			295			295			295			295			295
Less: Preferred stock (a)	470			470			240			96			96			470			96
(B) Total common equity	$	7,541		$	7,378		$	4,673		$	4,665		$	4,685		$	7,541		$	4,685
Less: Intangible assets (GAAP) (b)	1,864			1,876			1,552			1,558			1,563			1,864			1,563
(C) Tangible common equity (Non-GAAP)	$	5,677		$	5,502		$	3,120		$	3,107		$	3,122		$	5,677		$	3,122

Tangible Assets (Non-GAAP)
(D) Total assets (GAAP)	$	84,209		$	83,030		$	48,645		$	47,197		$	43,311		$	84,209		$	43,311
Less: Intangible assets (GAAP) (b)	1,864			1,876			1,552			1,558			1,563			1,864			1,563
(E) Tangible assets (Non-GAAP)	$	82,345		$	81,154		$	47,092		$	45,640		$	41,748		$	82,345		$	41,748












Period-end Shares Outstanding
(F) Period-end shares outstanding	555			555			312			312			311			555			311

Ratios


(A)/(D) Total equity to total assets (GAAP)	9.86		%	9.81		%	10.71		%	10.71		%	11.72		%	9.86		%	11.72		%
(C)/(E) Tangible common equity to tangible assets (“TCE/TA”) (Non-GAAP)	6.89		%	6.78		%	6.63		%	6.81		%	7.48		%	6.89		%	7.48		%
(B)/(F) Book value per common share (GAAP)	$	13.59		$	13.30		$	14.96		$	14.96		$	15.04		$	13.59		$	15.04
(C)/(F) Tangible book value per common share (Non-GAAP)	$	10.23		$	9.92		$	9.99		$	9.96		$	10.02		$	10.23		$	10.02

(a) Included in Total equity on the Consolidated Balance Sheet.

(b) Includes goodwill and other intangible assets, net of amortization.

Numbers may not foot due to rounding.


CONSOLIDATED NON-GAAP TO GAAP RECONCILIATION
Quarterly, Unaudited
	4Q20						3Q20						2Q20						1Q20						4Q19
($s in millions, except per share data)	GAAP		Notable Items		Non-GAAP		GAAP		Notable Items		Non-GAAP		GAAP		Notable Items		Non-GAAP		GAAP		Notable Items		Non-GAAP		GAAP		Notable Items		Non-GAAP

Interest income	$	574	$	—	$	574	$	598	$	—	$	598	$	347	$	—	$	347	$	378	$	—	$	378	$	404	$	—	$	404
Interest expense	53		—		53		66		—		66		41		—		41		76		—		76		93		—		93
Net interest income	522		—		522		532		—		532		305		—		305		303		—		303		311		—		311
Noninterest income:
Fixed income	104		—		104		111		—		111		112		—		112		96		—		96		81		—		81
Mortgage banking and title	57		—		57		66		—		66		4		—		4		2		—		2		4		—		4
Brokerage, trust, and insurance	31		—		31		30		—		30		22		—		22		23		—		23		22		—		22
Service charges and fees	53		—		53		50		—		50		35		—		35		36		—		36		39		—		39
Card and digital banking fees	18		—		18		17		—		17		12		—		12		12		—		12		14		—		14
Deferred compensation income	9		—		9		4		—		4		8		—		8		(10)		—		(10)		3		—		3
Other noninterest income	16		(1)		15		546		(532)		14		12		—		12		15		—		15		20		—		20
Total noninterest income	288		(1)		288		823		(532)		291		206		—		206		175		—		175		183		—		183
Total revenue	810		(1)		810		1,355		(532)		823		512		—		512		478		—		478		495		—		495
Noninterest expense:
Personnel expense:
Salaries and benefits	200		—		200		201		(1)		200		111		(5)		107		113		(1)		112		112		(4)		107
Incentives and commissions	110		(21)		89		126		(34)		91		79		—		79		81		—		81		63		—		63
Deferred compensation expense	9		—		9		3		—		3		9		—		9		(10)		—		(10)		4		—		4
Total personnel expense	319		(21)		298		329		(35)		294		200		(5)		195		183		(1)		182		179		(4)		174
Occupancy and equipment	76		(2)		74		77		(4)		73		46		—		46		44		—		44		44		—		44
Outside services	59		(7)		52		78		(32)		46		38		(5)		33		38		(2)		37		54		(18)		36
Amortization of intangible assets	15		(1)		14		15		(1)		14		5		—		5		5		—		5		6				6
Other noninterest expense	39		(4)		35		89		(44)		45		31		(4)		27		31		(3)		28		45		(15)		31
Total noninterest expense	508		(34)		474		587		(116)		471		321		(14)		307		302		(6)		296		328		(37)		291
Pre-provision net revenue	302		33		335		768		(416)		352		191		14		205		175		6		181		166		37		203
Provision for credit losses	1		—		1		227		(147)		80		121		—		121		154		—		154		9		—		9
Income before income taxes	301		33		334		541		(269)		272		69		14		84		21		6		27		157		37		194
Provision for income taxes	56		13		69		2		61		63		13		3		15		5		1		6		36		7		43
Net income	245		20		265		539		(331)		208		57		12		68		16		5		21		121		30		151
Net income attributable to noncontrolling interest	3		—		3		3		—		3		3		—		3		3		—		3		3		—		3
Net income attributable to controlling interest	242		20		262		536		(331)		205		54		12		66		14		5		18		118		30		148
Preferred stock dividends	8		—		8		13		—		13		2		—		2		2		—		2		2		—		2
Net income available to common shareholders	$	234	$	20	$	255	$	523	$	(331)	$	193	$	52	$	12	$	64	$	12	$	5	$	17	$	117	$	30	$	147
Common Stock Data
EPS	$	0.42	$	0.04	$	0.46	$	0.95	$	(0.60)	$	0.35	$	0.17	$	0.04	$	0.21	$	0.04	$	0.01	$	0.05	$	0.38	$	0.10	$	0.47
Basic shares	553				553		550				550		312				312		312				312		311				311
Diluted EPS	$	0.42	$	0.04	$	0.46	$	0.95	$	(0.60)	$	0.35	$	0.17	$	0.04	$	0.20	$	0.04	$	0.01	$	0.05	$	0.37	$	0.10	$	0.47
Diluted shares	557				557		551				551		313				313		313				313		313				313

Amounts adjusted for notable items as detailed on page 11.

Numbers may not foot due to rounding.


CONSOLIDATED NON-GAAP TO GAAP RECONCILIATION
Year-end, Unaudited
	2020						2019
($s in millions, except per share data)	GAAP		Notable Items		Non-GAAP		GAAP		Notable Items		Non-GAAP

Interest income	$	1,898	$	—	$	1,898	$	1,624	$	—	$	1,624
Interest expense	235		—		235		414		—		414
Net interest income	1,662		—		1,662		1,210		—		1,210
Noninterest income:
Fixed income	423		—		423		279		—		279
Mortgage banking and title	129		—		129		10		—		10
Brokerage, trust, and insurance	107		—		107		87		—		87
Service charges and fees	174		—		174		153		—		153
Card and digital banking fees	59		—		59		50		—		50
Deferred compensation income	11		—		11		11		—		11
Other noninterest income	589		(533)		56		64		—		64
Total noninterest income	1,492		(533)		960		654		—		654
Total revenue	3,155		(533)		2,622		1,864		—		1,864
Noninterest expense:
Personnel expense:
Salaries and benefits	625		(7)		619		454		(5)		449
Incentives and commissions	396		(55)		341		228		(10)		219
Deferred compensation expense	11		—		11		13		—		13
Total personnel expense	1,033		(62)		971		695		(15)		680
Occupancy and equipment	243		(6)		238		175		(3)		172
Outside services	213		(46)		166		190		(48)		143
Amortization of intangible assets	40		(2)		38		25		—		25
Other noninterest expense	189		(54)		136		148		(49)		98
Total noninterest expense	1,718		(170)		1,549		1,233		(114)		1,119
Pre-provision net revenue	1,436		(363)		1,073		631		114		745
Provision for credit losses	503		(147)		356		45		—		45
Income before income taxes	933		(216)		717		586		114		700
Provision for income taxes	76		78		154		133		24		157
Net income	857		(294)		563		452		90		543
Net income attributable to noncontrolling interest	12		—		12		11		—		11
Net income attributable to controlling interest	845		(294)		551		441		90		531
Preferred stock dividends	23		—		23		6		—		6
Net income available to common shareholders	$	822	$	(294)	$	528	$	435	$	90	$	525
Common Stock Data
EPS	$	1.90	$	(0.68)	$	1.22	$	1.39	$	0.29	$	1.67
Basic shares	432				432		314				314
Diluted EPS	$	1.89	$	(0.68)	$	1.22	$	1.38	$	0.29	$	1.66
Diluted shares	434				434		316				316

Amounts adjusted for notable items as detailed on page 11.

Numbers may not foot due to rounding.


CONSOLIDATED NON-GAAP TO GAAP RECONCILIATION
Quarterly and Year-end, Unaudited

($s in millions, except per share data)		4Q20			3Q20			2Q20			1Q20			4Q19			2020			2019

Adjusted Diluted EPS
Net income available to common ("NIAC") (GAAP)	a	$	234		$	523		$	52		$	12		$	117		$	822		$	435
Plus Tax effected notable items (Non-GAAP) (a)		20			(331)			12			5			30			(294)			90
Adjusted NIAC (Non-GAAP)	b	$	255		$	192		$	64		$	17		$	147		$	528		$	525

Diluted Shares (GAAP)	c	557			551			313			313			313			434			316

Diluted EPS (GAAP)	a/c	$	0.42		$	0.95		$	0.17		$	0.04		$	0.37		$	1.89		$	1.38
Adjusted diluted EPS (Non-GAAP)	b/c	$	0.46		$	0.35		$	0.20		$	0.05		$	0.47		$	1.22		$	1.66

Adjusted Net Income ("NI") and Adjusted Return on Assets ("ROA")
Net Income ("NI") (GAAP)		$	245		$	539		$	57		$	16		$	121		$	857		$	452
Plus Tax effected notable items (Non-GAAP) (a)		20			(331)			12			5			30			(294)			90
Adjusted NI (Non-GAAP)		$	265		$	208		$	68		$	21		$	151		$	563		$	543

NI (annualized) (GAAP)	d	$	974		$	2,144		$	228		$	66		$	481		$	857		$	452
Adjusted NI (annualized) (Non-GAAP)	e	$	1,055		$	828		$	275		$	84		$	600		$	563		$	543

Average assets (GAAP)	f	$	83,809		$	81,683		$	47,934		$	43,552		$	42,886		$	64,346		$	41,744

ROA (GAAP)	d/f	1.16		%	2.63		%	0.48		%	0.15		%	1.12		%	1.33		%	1.08		%
Adjusted ROA (Non-GAAP)	e/f	1.26		%	1.01		%	0.57		%	0.19		%	1.40		%	0.87		%	1.30		%

Return on Average Common Equity ("ROCE")/ Return on Average Tangible Common Equity ("ROTCE")/ Adjusted ROTCE




NIAC (annualized) (GAAP)	g	$	933		$	2,082		$	210		$	49		$	463		$	822		$	435
Adjusted NIAC (annualized) (Non-GAAP)	h	$	1,013		$	765		$	257		$	67		$	582		$	528		$	525

Average Common Equity (GAAP)	i	$	7,444		$	7,309		$	4,673		$	4,611		$	4,649		$	6,016		$	4,530
Intangible Assets (GAAP) (b)		1,871			1,794			1,555			1,560			1,566			1,696			1,575
Average Tangible Common Equity (Non-GAAP)	j	$	5,573		$	5,515		$	3,117		$	3,051		$	3,083		$	4,320		$	2,955
Equity Adjustment (Non-GAAP)		—			—			—			—			—			23			28
Adjusted Average Tangible Common Equity (Non-GAAP)	k	$	5,573		$	5,515		$	3,117		$	3,051		$	3,083		$	4,343		$	2,983

ROCE (GAAP)	g/i	12.53		%	28.49		%	4.50		%	1.05		%	9.97		%	13.66		%	9.60		%


ROTCE (Non-GAAP)	g/j	16.73		%	37.75		%	6.74		%	1.59		%	15.03		%	19.03		%	14.71		%
Adjusted ROTCE (Non-GAAP)	h/k	18.18		%	13.90		%	8.26		%	2.19		%	18.88		%	12.15		%	17.60		%

(a) Amounts adjusted for notable items as detailed on page 11.

(b) Includes goodwill and other intangible assets, net of amortization.

Numbers may not foot due to rounding.


CONSOLIDATED NON-GAAP TO GAAP RECONCILIATION
Quarterly and Year-end, Unaudited

(In millions)		4Q20			3Q20			2Q20			1Q20			4Q19			2020			2019

Adjusted Noninterest Income as a % of Total Revenue
Noninterest income (GAAP)	k	$	288		$	823		$	206		$	175		$	183		$	1,492		$	654
Plus notable items (GAAP) (a)		(1)			(532)			—			—			—			(533)			—
Adjusted noninterest income (Non-GAAP)	l	$	288		$	291		$	206		$	175		$	183		$	960		$	654

Revenue (GAAP)	m	$	810		$	1,355		$	512		$	478		$	495		$	3,155		$	1,864
Plus notable items (GAAP) (a)		(1)			(532)			—			—			—			(533)			—
Adjusted revenue (Non-GAAP)	n	$	810		$	823		$	512		$	478		$	495		$	2,623		$	1,864

Noninterest income as a % of total revenue (GAAP)	k/m	35.61		%	60.72		%	40.32		%	36.59		%	37.05		%	47.31		%	35.09		%
Adjusted noninterest income as a % of total revenue (Non-GAAP)	l/n	35.56		%	35.32		%	40.32		%	36.59		%	37.05		%	36.60		%	35.09		%

Adjusted Efficiency Ratio
Noninterest expense (GAAP)	o	$	508		$	587		$	321		$	302		$	328		$	1,718		$	1,233
Plus notable items (GAAP) (a)		(34)			(116)			(14)			(6)			(37)			(170)			(114)
Adjusted noninterest expense (Non-GAAP)	p	$	474		$	471		$	307		$	296		$	291		$	1,549		$	1,119

Revenue (GAAP)	q	$	810		$	1,355		$	512		$	478		$	495		$	3,155		$	1,864
Plus notable items (GAAP) (a)		(1)			(532)			—			—			—			(533)			—
Adjusted revenue (Non-GAAP)	r	$	810		$	823		$	512		$	478		$	495		$	2,622		$	1,864

Efficiency ratio (GAAP)	o/q	62.71		%	43.31		%	62.74		%	63.26		%	66.35		%	54.47		%	66.15		%
Adjusted efficiency ratio (Non-GAAP)	p/r	58.57		%	57.26		%	59.95		%	62.05		%	58.88		%	59.06		%	60.02		%

(a) Amounts adjusted for notable items as detailed on page 11.

(b) Includes goodwill and other intangible assets, net of amortization.

Numbers may not foot due to rounding.

GLOSSARY OF TERMS

Common Equity Tier 1 Ratio: Ratio consisting of common equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, less disallowed portions of goodwill, other intangibles, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

Current Expected Credit Loss (“CECL”): New accounting standard that focuses on estimation of expected losses over the life of the loans which is measured by the difference between amortized cost and the net amount expected to be collected.

Fully Taxable Equivalent (“FTE”): Reflects the amount of tax-exempt income adjusted to a level that would yield the same after-tax income had that income been subject to taxation.

Non-Purchased Credit Deteriorated (“Non-PCD”) Financial Assets: Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that, as of the date of acquisition, do not have a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer’s assessment.

Purchased Credit Deteriorated (“PCD”) Financial Assets: Acquired individual financial assets (or acquired groups of financial assets with similar risk characteristics) that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by an acquirer’s assessment.

Tier 1 Capital Ratio: Ratio consisting of shareholders’ equity adjusted for certain unrealized gains/(losses) on available-for-sale securities, plus qualifying portions of noncontrolling interests, less disallowed portions of goodwill, other intangible assets, and deferred tax assets as well as certain other regulatory deductions divided by risk-weighted assets.

Key Ratios

Return on Average Assets: Ratio is annualized net income to average total assets.

Return on Average Common Equity: Ratio is annualized net income available to common shareholders to average common equity.

Return on Average Tangible Common Equity: Ratio is annualized net income available to common shareholders to average tangible common equity.

Noninterest Income as a Percentage of Total Revenue: Ratio is noninterest income to total revenue.

Efficiency Ratio: Ratio is noninterest expense to total revenue.

Leverage Ratio: Ratio is tier 1 capital to average assets for leverage.

Asset Quality - Consolidated Key Ratios

Nonperforming loans and leases ("NPL") %: Ratio is nonaccruing loans and leases in the loan portfolio to total period-end loans and leases.

Net charge-offs %: Ratio is annualized net charge-offs to total average loans and leases.

Allowance / loans and leases: Ratio is allowance for loan and lease losses to total period-end loans and leases.

Allowance / Nonperforming loans and leases: Ratio is allowance for loan and lease losses to nonperforming loans and leases in the loan portfolio.

Allowance / charge-offs: Ratio is allowance for loan and lease losses to annualized net charge-offs.

Operating Segments

First Horizon (FHN) 8-KResults of Operations and Financial Condition