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First Horizon Corp (FHN) SEC Filing 10-K Annual Report for the fiscal year ending Saturday, December 31, 2022

First Horizon National Corp

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CIK: 36966 Ticker: FHN






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First Horizon Corporation Reports Fourth Quarter 2022 Net Income Available to Common Shareholders of
$258 Million, or EPS of $0.45; $293 Million, or $0.51, on an Adjusted Basis*

Pre-provision net revenue down 7% from the prior quarter and up 5% on an adjusted basis*

ROTCE of 19.1% and adjusted ROTCE of 21.7% with tangible book value per share of $10.23*

MEMPHIS, TN (January 18, 2023) – First Horizon Corporation (NYSE: FHN or “First Horizon”) today reported fourth quarter net income available to common shareholders ("NIAC") of $258 million, or earnings per share of $0.45, compared with third quarter 2022 NIAC of $257 million, or earnings per share of $0.45.

Fourth quarter 2022 results were reduced by a net $34 million after-tax, or $0.06 per share, of notable items compared with a net $5 million, or $0.01 per share, increase in third quarter 2022. Excluding notable items, adjusted fourth quarter 2022 NIAC of $293 million, or $0.51 per share, increased from $252 million, or $0.44 per share in third quarter 2022.

Full year 2022 NIAC of $868 million, or earnings per share of $1.53, compares with $962 million, or earnings per share of $1.74, in 2021, largely reflecting the impact of provision expense. 2022 results included a net $82 million after-tax reduction, or $0.15, from notable items compared with $179 million, or $0.32 per share, in 2021. On an adjusted basis, full year 2022 NIAC of $950 million, or earnings per share of $1.68, compares with NIAC of $1.1 billion, or earnings per share $2.07 in 2021.    

“Our results for the quarter and year reflect the strength of our markets and the continued momentum of our attractive business mix,” said Chairman and Chief Executive Officer Bryan Jordan. “Amidst global uncertainty and a challenging macroeconomic landscape, we delivered exceptional net interest income, net interest margin, strong loan growth, and successfully achieved our annualized net cost save target of two hundred million.”

Jordan continued, “I am incredibly proud of our associates for their steadfast commitment to drive value for our clients, communities, and shareholders as we look forward to completing the pending transaction with The Toronto-Dominion Bank (TD).”

Notable Items
Quarterly/Annually, Unaudited ($s in millions, except per share data)4Q223Q224Q2120222021
Summary of Notable Items:
IBKC:
Purchase accounting gain/(loss)*$— $— $— $— $(1)
Other noninterest income— — 4 1 5 
Merger/acquisition expense(4)(3)(38)(49)(187)
Total IBKC merger-acquisition-related items(4)(3)(35)(48)(183)
TD:
Transaction-related expense(31)(21)— (87)— 
Total TD transaction-related items(31)(21)— (87)— 
Total Net Merger/acquisition/transaction-related items(36)(24)(35)(135)(183)
Other notable items:
Gain/(loss) on TruPS redemption (other noninterest income)— — (3)— (26)
Gain on mortgage servicing rights (mortgage banking and title)— — — 12 — 
Gain on sale of title services business (other noninterest income)1 21 — 22 — 
Gain related to equity securities investment (other noninterest income)— 10 — 16 — 
Other notable expenses(10)— (16)(22)(26)
Total other notable items (9)31 (19)28 (52)
Total Notable items (pre-tax)(45)7 (54)(107)235 
Total Notable items (after-tax)$(34)$5 $(41)$(82)$(179)
EPS impact of notable items$(0.06)$0.01 $(0.08)$(0.15)$(0.32)
Numbers may not foot due to rounding. * Purchase accounting gain is nontaxable income.
*ROTCE, PPNR, Core net interest income (NII), tangible book value per share, loans and leases excluding PPP and/or LMC, and "Adjusted" results are Non-GAAP Financial Measures; NII, Total Revenue, NIM and PPNR are presented on a fully taxable equivalent basis; References to loans include leases and EPS are based on diluted shares; Capital ratios are preliminary. See page 7 for information on our use of Non-GAAP measures and their reconciliation to GAAP beginning on page 23.
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Fourth quarter pre-tax net notable items include TD transaction-related costs of $31 million, and IBKC merger-related expense of $4 million. Other notable items reflect $10 million tied to derivative valuation adjustments related to prior Visa Class-B share sales and a $1 million additional gain on the sale of the title services business.


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Fourth Quarter 2022 Versus Third Quarter 2022 Highlights
•Total revenue of $882 million increased $7 million and adjusted revenue of $885 million increased $38 million, or 4%, reflecting strength in net interest income.
•Net interest income of $709 million increased $47 million, or 7%, despite a $6 million reduction in net merger-related and PPP benefits. Core net interest income was up $53 million as the benefit of higher rates and loan balances was partially offset by higher funding costs.
•Noninterest income of $174 million decreased $39 million and adjusted noninterest income of $173 million decreased $8 million as higher deferred compensation income and other noninterest income was more than offset by reductions in fixed income and mortgage banking.
•Noninterest expense of $503 million increased $35 million and adjusted noninterest expense of $458 million increased $14 million largely as a $10 million increase in other noninterest income and a $9 million increase in deferred compensation expense was partially offset by a reduction in salaries and employee benefits.
•Provision expense of $45 million compared with $60 million in third quarter 2022 reflects the impact of loan growth and revised macroeconomic outlook. 4Q22 provision includes reduction in losses expected from Hurricane Ian.
•Average interest-earning assets of $72.8 billion decreased $3.2 billion largely as a $1.0 billion increase in loans was more than offset by a $3.7 billion decrease in interest-bearing deposits with banks and a $0.2 billion decrease in investment securities.
•Average loans before the impact of PPP up $1.1 billion as an increase in commercial balances and consumer real estate was partially offset by a $617 million decrease in loans to mortgage companies ("LMC").
•Period-end loans before the impact of PPP increased $801 million, or 1%, driven by a $419 million increase in commercial. Period-end commercial loans excluding PPP and LMC rose 2%.
•Average deposits of $64.9 billion decreased $3.3 billion, or 5%, driven by a $1.7 billion decrease in DDA and a $1.1 billion decrease in savings. Total deposit costs of 69 basis points increased 44 basis points.
•Allowance for credit losses ("ACL") to loans ratio of 1.33% remained relatively stable compared to 1.31% at September 30, 2022. The ACL to nonperforming loans ratio of 244% decreased from 258% at September 30, 2022.
•Net charge-offs of $26 million increased $14 million; nonperforming loans of $316 million increased 8% linked quarter and the nonperforming loan ratio of 0.54% increased from 0.51% at September 30, 2022.
•ROCE of 14.4%; ROTCE of 19.1%; Adjusted ROTCE of 21.7%; CET 1 ratio of 10.2%; and total capital ratio of 13.3%.
•Tangible book value per share of $10.23 at December 31, 2022 compared with $9.72 at September 30, 2022 and reflected a $0.57 increase tied to adjusted NIAC and a $0.15 increase tied to MTM valuation adjustments on AFS securities and cash flow hedges.
Strategic Update
IBKC Merger
•Achieved $200 million of targeted annualized net cost saves target in 4Q22.
Pending Acquisition by TD
•TD expects the deal to close in the first half of its 2023 fiscal year, subject to the receipt of required regulatory approvals and satisfaction of other closing conditions.
•Continued progress on integration planning and Legal Day One readiness.


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SUMMARY RESULTS
Quarterly, Unaudited
4Q22 Change vs.
($s in millions, except per share and balance sheet data)4Q223Q224Q213Q224Q21
$/bp%$/bp%
Income Statement
Interest income - taxable equivalent1
$860 $737 $534 $123 17 %$326 61 %
Interest expense- taxable equivalent1
148 71 33 77 108 115 NM
Net interest income- taxable equivalent712 666 502 46 7 210 42 
Less: Taxable-equivalent adjustment4 4 3 — — 1 33 
Net interest income709 662 498 47 7 211 42 
Noninterest income174 213 247 (39)(18)(73)(30)
      Total revenue882 875 745 7 1 137 18 
Noninterest expense503 468 528 35 7 (25)(5)
Pre-provision net revenue3
379 406 217 (27)(7)162 75 
Provision for credit losses45 60 (65)(15)(25)110 NM
Income before income taxes334 346 282 (12)(3)52 18 
Provision for income taxes64 78 53 (14)(18)11 21 
Net income270 268 229 2 1 41 18 
Net income attributable to noncontrolling interest4 3 3 1 33 1 33 
Net income attributable to controlling interest266 265 227 1 — 39 17 
Preferred stock dividends8 8 8 — — — — 
Net income available to common shareholders$258 $257 $219 $1 — %$39 18 %
Adjusted net income4
$304 $263 $270 $41 16 %$34 13 %
Adjusted net income available to common shareholders4
$293 $252 $260 $41 16 %$33 13 %
Common stock information
EPS$0.45 $0.45 $0.40 $— — %$0.05 13 %
Adjusted EPS4
$0.51 $0.44 $0.48 $0.07 16 %$0.03 6 %
Diluted shares8
572 570 542 2 — %30 6 %
Key performance metrics
Net interest margin3.89 %3.49 %2.42 %40 bp147 bp
Efficiency ratio57.07 53.56 70.88 351 (1,381)
Adjusted efficiency ratio4
51.70 52.42 63.31 (72)(1,161)
Effective income tax rate19.19 22.58 18.63 (339)56 
Return on average assets1.35 1.29 1.02 6 33 
Adjusted return on average assets4
1.52 1.27 1.21 25 31 
Return on average common equity (“ROCE")14.4 13.9 11.3 57 316 
Return on average tangible common equity (“ROTCE”)4
19.1 18.2 14.7 91 442 
Adjusted ROTCE4
21.7 17.9 17.5 379 417 
Noninterest income as a % of total revenue19.68 24.30 33.10 (462)(1,342)
Adjusted noninterest income as a % of total revenue4
19.55 %21.37 %32.95 %(182)bp(1,340)bp
Balance Sheet (billions)
Average loans$57.6 $56.5 $54.7 $1.0 2 %$2.9 5 %
Average deposits64.9 68.1 74.6 (3.3)(5)(9.7)(13)
Average assets79.5 82.6 89.0 (3.0)(4)(9.5)(11)
Average common equity$7.1 $7.4 $7.7 $(0.3)(3)%$(0.6)(8)%
Asset Quality Highlights
Allowance for credit losses to loans and leases1.33 %1.31 %1.34 %2 bp(1)bp
Net charge-off ratio0.18 0.08 0.01 9 17 
Nonperforming loan and leases ratio0.54 %0.51 %0.50 %4 bp4 bp
Capital Ratio Highlights (current quarter is an estimate)
Common Equity Tier 110.2 %9.9 %9.9 %24 bp25 bp
Tier 111.9 11.7 11.0 22 88 
Total Capital13.3 13.1 12.3 24 99 
Tier 1 leverage10.4 %9.8 %8.1 %57 bp228 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.


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SUMMARY RESULTS
Annual, Unaudited
($s in millions, except per share and balance sheet data)202220212022 vs. 2021
$/bp%
Income Statement
Interest income - taxable equivalent1
$2,696 $2,170 $526 24 %
Interest expense- taxable equivalent1
292 163 129 79 
Net interest income- taxable equivalent2,405 2,006 399 20 
Less: Taxable-equivalent adjustment13 12 1 8 
Net interest income2,392 1,994 398 20 
Noninterest income816 1,076 (260)(24)
      Total revenue3,208 3,070 138 4 
Noninterest expense1,953 2,095 (142)(7)
Pre-provision net revenue4
1,254 975 279 29 
Provision for credit losses5
95 (310)405 131 
Income before income taxes1,159 1,285 (126)(10)
Provision for income taxes247 274 (27)(10)
Net income912 1,010 (98)(10)
Net income attributable to noncontrolling interest12 11 1 9 
Net income attributable to controlling interest900 999 (99)(10)
Preferred stock dividends32 37 (5)(14)
Net income available to common shareholders$868 $962 $(94)(10)
Adjusted net income5
$994 $1,189 $(196)(17)
Adjusted net income available to common shareholders5
$950 $1,140 $(190)(17)%
Common stock information
EPS$1.53 $1.74 $(0.21)(12)%
Adjusted EPS5
$1.68 $2.07 $(0.39)(19)%
Diluted shares566 551 15 3 %
Key performance metrics
Net interest margin3.10 %2.48 %62 bp
Efficiency ratio60.90 68.25 (735)
Adjusted efficiency ratio6
56.64 60.64 (400)
Effective income tax rate21.32 21.36 (4)
Return on average assets1.08 1.15 (7)
Adjusted return on average assets6
1.18 1.36 (18)
Return on average common equity (“ROCE")11.8 12.5 (72)
Return on average tangible common equity (“ROTCE”)6
15.6 16.5 (88)
Adjusted ROTCE6
17.0 19.3 (233)
Noninterest income as a % of total revenue25.44 35.04 (960)
Adjusted noninterest income as a % of total revenue6
24.14 %36.38 %(1,224)bp
Balance Sheet (billions)
Average loans$56.0 $56.3 $(0.3)(1)%
Average deposits69.7 73.1 (3.4)(5)
Average assets84.2 87.6 (3.4)(4)
Average common equity$7.3 $7.7 $(0.3)(4)%
Asset Quality Highlights
Allowance for credit losses to loans and leases1.33 %1.34 %(1)bp
Net charge-off ratio0.11 %— 11 
Nonperforming loan and leases ratio0.54 %0.50 %4 bp
Capital Ratio Highlights (current quarter is an estimate)
Common Equity Tier 110.2 %9.9 %24 bp
Tier 111.9 11.0 22 
Total Capital13.3 12.3 24 
Tier 1 leverage10.4 %8.1 %57 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.



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Fourth Quarter 2022 versus Third Quarter 2022
Net interest income
Net interest income of $709 million increased $47 million despite a $6 million reduction tied to net merger-related and PPP benefits. Core net interest income increased $53 million as the benefit of higher rates and loan balances was partially offset by higher funding costs. Net interest margin of 3.89% improved 40 basis points largely as the benefit of higher rates, loan growth and lower cash was partially offset by the impact of higher funding costs.

Noninterest income
Noninterest income of $174 million decreased $39 million and included a $31 million decrease in the benefit of notable items. Adjusted noninterest income of $173 million decreased $8 million reflecting reductions in fixed income and mortgage banking partially offset by an increase in deferred compensation. Fixed income average daily revenue of $403 thousand compared with $524 thousand in third quarter 2022 reflecting the impact of increasing interest rates, macro economic uncertainty and market volatility.

Noninterest expense
Noninterest expense of $503 million increased $35 million and included a $21 million increase in notable items. Adjusted noninterest expense of $458 million increased $14 million largely as higher deferred compensation expense and other noninterest expense was partially offset by a reduction in salaries and employee benefits. Linked quarter trends also reflect a $4 million benefit tied to incremental IBKC merger cost savings.

Loans and leases
Average loan and lease balances of $57.6 billion increased $1.0 billion reflecting a 1% increase in commercial and a 3% increase in consumer. Commercial loan growth reflected a $442 million increase in commercial and industrial and a $169 million increase in commercial real estate. Consumer loan growth increased $411 million compared to the prior quarter, driven by a $416 million increase in consumer real estate. Results reflect a $617 million reduction in loans to mortgage companies ("LMC") and a $83 million decrease in PPP loans. Loan balances excluding PPP and LMC increased $1.8 billion compared to the prior quarter, driven by a $1.3 billion increase in commercial.

Period-end loans and leases of $58.1 billion increased $0.7 billion from third quarter 2022, reflecting a 1% increase in commercial and a 3% increase in consumer. Before the impact of PPP and LMC, period-end loans increased $1.3 billion, or 2%, driven by a $0.9 billion increase in all other commercial loans.

Deposits
Average deposits of $64.9 billion decreased $3.3 billion, or 5%. Period-end deposits of $63.5 billion decreased $2.5 billion reflecting a $2.3 billion decrease in noninterest-bearing and a $0.2 billion decrease in interest-bearing. Total deposit costs of 69 basis points increased 44 basis points with a 70 basis point increase in interest-bearing deposit costs.

Asset quality
Provision expense of $45 million compared with $60 million in third quarter 2022 reflects the impact of loan growth and revised macroeconomic outlook. 4Q22 provision includes reduction in losses expected from Hurricane Ian.

Net charge-offs of $26 million, or 18 basis points, compared with $12 million, or 8 basis points in third quarter 2022.

Nonperforming loans of $316 million increased $24 million. Fourth quarter 2022 ACL to nonperforming loans coverage ratio of 244% compared with 258% in third quarter 2022.

The ACL to loans ratio increased to 1.33% from 1.31% in the third quarter 2022.


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Capital
CET1 ratio of 10.2% in fourth quarter 2022 compared with 9.9% in third quarter 2022. Total capital ratio of 13.3% vs. 13.1% in third quarter 2022.

Income taxes
The fourth quarter 2022 effective tax rate of 19.2% compares with 22.6% in third quarter 2022. On an adjusted basis, the effective tax rate of 19.8% in the fourth quarter 2022 improved from 22.4% in third quarter 2022.

Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements pertain to FHN's beliefs, plans, goals, expectations, and estimates. Forward-looking statements are not a representation of historical information, but instead pertain to future operations, strategies, financial results, or other developments. Forward-looking statements can be identified by the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “should,” “is likely,” “will,” “going forward,” and other expressions that indicate future events and trends.

Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, operational, economic, and competitive uncertainties and contingencies, many of which are beyond FHN’s control, and many of which, with respect to future business decisions and actions (including acquisitions and divestitures), are subject to change and could cause FHN’s actual future results and outcomes to differ materially from those contemplated or implied by forward-looking statements or historical performance. Examples of uncertainties and contingencies include those mentioned: in this document; in Items 2.02 and 7.01 of FHN’s Current Report on Form 8-K to which this document has been filed as an exhibit; in the forepart, and in Items 1, 1A, and 7, of FHN’s most recent Annual Report on Form 10-K, as amended; and in the forepart, and in Item 1A of Part II, of FHN’s Quarterly Report(s) on Form 10-Q filed this year.

FHN assumes no obligation to update or revise any forward-looking statements that are made in this document or in any other statement, release, report, or filing from time to time.

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

Certain measures included in this report are “non-GAAP,” meaning they are not presented in accordance with generally accepted accounting principles 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.

The non-GAAP measures presented in this earnings release are fully taxable equivalent measures, core net interest income ("NII"), pre-provision net revenue ("PPNR"), loans and leases excluding paycheck protection program ('PPP") and/or Loans to Mortgage Companies ("LMC"), return on average tangible common equity (“ROTCE”), tangible common equity (“TCE”) to tangible assets (“TA”), tangible book value ("TBV") per common share, and various consolidated and segment results and performance measures and ratios adjusted for notable items.

Presentation of regulatory measures, even those which are not GAAP, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions. 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 ("CET1"), 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
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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, which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios.

Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items, beginning on page 23.

First Horizon Corp. (NYSE: FHN), with $79.0 billion in assets as of December 31, 2022, is a leading regional financial services company, dedicated to helping our clients, communities and associates unlock their full potential with capital and counsel. Headquartered in Memphis, TN, the banking subsidiary First Horizon Bank operates in 12 states across the southern U.S. The Company and its subsidiaries offer commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking services. First Horizon has been recognized as one of the nation's best employers by Fortune and Forbes magazines and a Top 10 Most Reputable U.S. Bank. More information is available at www.FirstHorizon.com.

Contact: Investor Relations - investorrelations@firsthorizon.com
Media Relations - Beth.Ardoin@firsthorizon.com
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CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited
     4Q22 Change vs.2022 vs 2021
($s in millions, except per share data)4Q223Q222Q221Q224Q213Q224Q2120222021
$ %$ %$%
Interest income - taxable equivalent1
$860 $737 $586 $513 $534 $123 17 %$326 61 %$2,696 $2,170 $526 24 %
Interest expense- taxable equivalent1
148 71 41 31 33 77 108 115 NM 292 163 129 79 
Net interest income- taxable equivalent712 666 545 482 502 46 7 210 42 2,405 2,006 399 20 
Less: Taxable-equivalent adjustment4 4 3 3 3 — — 1 33 13 12 1 8 
Net interest income709 662 542 479 498 47 7 211 42 2,392 1,994 398 20 
Noninterest income:
Fixed income35 46 51 73 82 (11)(24)(47)(57)205 406 (201)(50)
Mortgage banking and title4 9 34 22 28 (5)(56)(24)(86)68 154 (86)(56)
Brokerage, trust, and insurance33 34 36 37 36 (1)(3)(3)(8)141 141 — — 
Service charges and fees56 56 57 57 56 — — — — 226 219 7 3 
Card and digital banking fees20 21 23 20 19 (1)(5)1 5 84 78 6 8 
Deferred compensation income7 (3)(17)(4)— 10 NM 7 NM (17)13 (30)NM
Other noninterest income20 50 16 24 25 (30)(60)(5)(20)110 66 44 67 
Total noninterest income174 213 201 229 247 (39)(18)(73)(30)816 1,076 (260)(24)
Total revenue882 875 743 707 745 7 1 137 18 3,208 3,070 138 4 
Noninterest expense:
Personnel expense:
Salaries and benefits178 186 190 190 190 (8)(4)(12)(6)743 767 (24)(3)
Incentives and commissions97 92 93 94 93 5 5 4 4 376 423 (47)(11)
Deferred compensation expense7 (2)(18)(5)7 9 NM — — (18)20 (38)NM
Total personnel expense281 275 265 280 290 6 2 (9)(3)1,101 1,210 (109)(9)
Occupancy and equipment2
71 71 73 72 74 — — (3)(4)286 300 (14)(5)
Outside services70 66 70 84 81 4 6 (11)(14)290 290 — — 
Amortization of intangible assets13 13 13 13 14 — — (1)(7)51 56 (5)(9)
Other noninterest expense69 44 68 44 70 25 57 (1)(1)225 239 (14)(6)
Total noninterest expense503 468 489 493 528 35 7 (25)(5)1,953 2,095 (142)(7)
Pre-provision net revenue3
379 406 255 215 217 (27)(7)162 75 1,254 975 279 29 
Provision for credit losses45 60 30 (40)(65)(15)(25)110 NM 95 (310)405 131 
Income before income taxes334 346 225 255 282 (12)(3)52 18 1,159 1,285 (126)(10)
Provision for income taxes64 78 48 57 53 (14)(18)11 21 247 274 (27)(10)
Net income270 268 177 198 229 2 1 41 18 912 1,010 (98)(10)
Net income attributable to noncontrolling interest4 3 3 3 3 1 33 1 33 12 11 1 9 
Net income attributable to controlling interest266 265 174 195 227 1 — 39 17 900 999 (99)(10)
Preferred stock dividends8 8 8 8 8 — — — — 32 37 (5)(14)
Net income available to common shareholders$258 $257 $166 $187 $219 $1 — %$39 18 %$868 $962 $(94)(10)%
Common Share Data
EPS$0.48 $0.48 $0.31 $0.35 $0.41 $— — %$0.07 18 %$1.62 $1.76 $(0.14)(8)%
Basic shares536 536 535 533 537 — — (1)— 535 546 (11)(2)
Diluted EPS$0.45 $0.45 $0.29 $0.34 $0.40 $— — $0.05 13 $1.53 $1.74 $(0.21)(12)
Diluted shares8
572 570 569 550 542 2 — %30 6 %566 551 15 3 %
Effective tax rate19.2 %22.6 %21.3 %22.4 %18.6 %21.3 %21.4 %
Numbers may not foot due to rounding. See footnote disclosures on page 22.
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ADJUSTED5 FINANCIAL DATA - SEE NOTABLE ITEMS ON PAGE 11
Quarterly, Unaudited
     4Q22 Change vs.2022 vs 2021
($s in millions, except per share data)4Q223Q222Q221Q224Q213Q224Q2120222021
$%$%$%
Net interest income (FTE)1
$712 $666 $545 $482 $502 $46 7 %$210 42 %$2,405 $2,006 $399 20 %
Adjusted noninterest income:
Fixed income35 46 51 73 82 (11)(24)(47)(57)205 406 (201)(50)
Adjusted mortgage banking and title4 9 22 22 28 (5)(56)(24)(86)56 154 (98)(64)
Brokerage, trust, and insurance33 34 36 37 36 (1)(3)(3)(8)141 141 — — 
Service charges and fees56 56 57 57 56 — — — — 226 219 7 3 
Card and digital banking fees20 21 23 20 19 (1)(5)1 5 84 78 6 8 
Deferred compensation income7 (3)(17)(4)— 10 NM 7 NM (17)13 (30)NM
Adjusted other noninterest income20 18 15 18 25 2 11 (5)(20)71 89 (18)(20)
Adjusted total noninterest income$173 $181 $188 $223 $246 $(8)(4)%$(73)(30)%$765 $1,099 $(334)(30)%
Total revenue (FTE)1
$885 $847 $733 $704 $748 $38 4 %$137 18 %$3,170 $3,105 $65 2 %
Adjusted noninterest expense:
Adjusted personnel expense:
Adjusted salaries and benefits$178 $185 $190 $188 $189 $(7)(4)%$(11)(6)%$741 $766 $(25)(3)%
Adjusted Incentives and commissions70 68 71 92 84 2 3 (14)(17)301 367 (66)(18)%
Adjusted deferred compensation expense7 (2)(18)(5)1 9 NM 6 NM (18)14 (32)NM
Adjusted total personnel expense254 251 244 275 274 3 1 (20)(7)1,024 1,147 (123)(11)%
Adjusted occupancy and equipment2
71 70 72 72 73 1 1 (2)(3)284 294 (10)(3)%
Adjusted outside services64 64 61 59 66 — — (2)(3)248 241 7 3 %
Adjusted amortization of intangible assets12 12 12 12 13 — — (1)(8)48 53 (5)(9)%
Adjusted other noninterest expense58 48 50 37 46 10 21 12 26 192 148 44 30 %
Adjusted total noninterest expense$458 $444 $438 $455 $474 $14 3 %$(16)(3)%$1,795 $1,883 $(88)(5)%
Adjusted pre-provision net revenue3
$424 $403 $295 $249 $274 $21 5 %$150 55 %$1,362 $1,222 $140 11 %
Provision for credit losses$45 $60 $30 $(40)$(65)$(15)(25)%$110 NM $95 $(310)$405 131 %
Adjusted net income available to common shareholders$293 $252 $195 $211 $260 $41 16 %$33 13 %$950 $1,140 $(190)(17)%
Adjusted Common Share Data
Adjusted diluted EPS$0.51 $0.44 $0.34 $0.38 $0.48 $0.07 16 %$0.03 6 %$1.68 $2.07 $(0.39)(19)%
Diluted shares8
572 570 569 550 542 2 — %30 6 %566 551 15 3 %
Adjusted effective tax rate19.8 %22.4 %21.7 %22.5 %19.5 %21.5 %21.8 %
Adjusted ROTCE21.7 %17.9 %14.2 %14.7 %17.5 %17.0 %19.3 %
Adjusted efficiency ratio51.7 %52.4 %59.8 %64.6 %63.3 %56.6 %60.6 %
Numbers may not foot due to rounding.
See footnote disclosures on page 22.

10


NOTABLE ITEMS
Quarterly, Unaudited
(In millions)4Q223Q222Q221Q224Q2120222021
Summary of Notable Items:
Purchase accounting gain*$— $— $— $— $— $— $(1)
Gain/(loss) on TRUPS redemption (other noninterest income)— — — — (3)— (26)
IBKC Branch sale gain (other noninterest income)— — — — 4 1 5 
Gain on sale of title services business1 21 — — — 22 — 
Gain related to equity securities investments— 10 — 6 — 16 — 
Gain on sale of mortgage servicing rights— — 12 — — 12 — 
IBKC merger/acquisition expense(4)(3)(13)(28)(38)(49)(187)
TD transaction-related expense (31)(21)(25)(9)— (87)— 
Other notable expenses**(10)— (12)— (16)(22)(26)
Total notable items(45)7 (38)(32)(54)(107)235 
EPS impact of notable items$(0.06)$0.01 $(0.05)$(0.04)$(0.08)$(0.15)$(0.32)
Numbers may not foot due to rounding
* Purchase accounting gain is nontaxable income.
** 4Q22 and 2Q22 includes $10 million and $12 million, respectively of Visa derivative valuation expense; 4Q21 includes $10 million of Visa derivative valuation expense and $6 million of deferred compensation expense.



IMPACT OF NOTABLE ITEMS:
Quarterly, Unaudited
     
(In millions)4Q223Q222Q221Q224Q2120222021
Impacts of Notable Items:
Noninterest income:
Mortgage banking and title$— $— $(12)$— $— $(12)$— 
Other noninterest income(1)(32)— (6)— (38)23 
Total noninterest income$(1)$(32)$(13)$(6)$— $(51)$23 
Noninterest expense:
Personnel expenses:
Salaries and benefits$— $— $1 $(2)$— $(2)$(1)
Incentives and commissions(27)(24)(22)(2)(9)(76)(56)
Deferred compensation expense— — — — (6)— (6)
Total personnel expenses(27)(25)(21)(4)(16)(77)(63)
Occupancy and equipment2
— (1)(1)