☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 SECURITIES EXCHANGE ACT OF 1934 |
TN | 62-0803242 | ||||||||||
(State or other jurisdiction incorporation of organization) | (IRS Employer Identification No.) | ||||||||||
165 Madison Avenue | |||||||||||
Memphis, | Tennessee | 38103 | |||||||||
(Address of principal executive office) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of Exchange on which Registered | ||||||
$.625 Par Value Common Capital Stock | FHN | New York Stock Exchange LLC | ||||||
Depositary Shares, each representing a 1/400th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series B | FHN PR B | New York Stock Exchange LLC | ||||||
Depositary Shares, each representing a 1/400th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C | FHN PR C | New York Stock Exchange LLC | ||||||
Depositary Shares, each representing a 1/400th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series D | FHN PR D | New York Stock Exchange LLC | ||||||
Depositary Shares, each representing a 1/4,000th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series E | FHN PR E | New York Stock Exchange LLC | ||||||
Depositary Shares, each representing a 1/4,000th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series F | FHN PR F | New York Stock Exchange LLC | ||||||
Large Accelerated Filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||||||||||
Smaller reporting company | ☐ | Emerging Growth Company | ☐ |
Note: The following relate to disclosure requirements which are not yet in effect and do not apply to this report. | ||
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ | ||
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ |
TABLE OF CONTENTS and GLOSSARY |
ITEM | Page | ITEM | Page | |||||||||||||||||
Glossary | Item 8. | Financial Statements and Supplementary Data | ||||||||||||||||||
Executive Summary of Principal Investment Risks | Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | ||||||||||||||||||
Forward-Looking Statements | ||||||||||||||||||||
Part I | Item 9A. | Controls and Procedures | ||||||||||||||||||
Item 1. | Business | Item 9B. | Other Information | |||||||||||||||||
Item 1A. | Risk Factors | Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | |||||||||||||||||
Item 1B. | Unresolved Staff Comments | Part III | ||||||||||||||||||
Item 2. | Properties | Item 10. | Directors and Executive Officers of the Registrant | |||||||||||||||||
Item 3. | Legal Proceedings | Item 11. | Executive Compensation | |||||||||||||||||
Item 4. | Mine Safety Disclosures | Item 12. | Security Ownership of Certain Beneficial Owners | |||||||||||||||||
Supplemental Part I Information | and Management and Related Stockholder Matters | |||||||||||||||||||
Part II | ||||||||||||||||||||
Item 5. | Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer | Item 13. | Certain Relationships and Related Transactions | |||||||||||||||||
Purchases of Equity Securities | Item 14. | Principal Accountant Fees and Services | ||||||||||||||||||
Item 6. | [reserved] | Part IV | ||||||||||||||||||
Item 7. | Management’s Discussion and Analysis of | Item 15. | Exhibits and Financial Statement Schedules | |||||||||||||||||
Financial Condition and Results of Operations | Item 16. | Form 10-K Summary | ||||||||||||||||||
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | Signatures |
ACL | Allowance for credit losses | ||||
AFS | Available for sale | ||||
AIR | Accrued interest receivable | ||||
ALCO | Asset/Liability Committee | ||||
ALLL | Allowance for loan and lease losses | ||||
ALM | Asset/liability management | ||||
AOCI | Accumulated other comprehensive income | ||||
ASC | FASB Accounting Standards Codification | ||||
Associate | Person employed by FHN |
ASU | Accounting Standards Update | ||||
Bank | First Horizon Bank | ||||
BOLI | Bank-owned life insurance | ||||
C&I | Commercial, financial, and industrial loan portfolio | ||||
CAS | Credit Assurance Services | ||||
CARES Act | Coronavirus Aid, Relief, and Economic Security Act | ||||
CBF | Capital Bank Financial | ||||
CCAR | Comprehensive Capital Analysis and Review |
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TABLE OF CONTENTS and GLOSSARY |
CECL | Current expected credit loss | ||||
CEO | Chief Executive Officer | ||||
CFPB | Consumer Financial Protection Bureau | ||||
CMO | Collateralized mortgage obligations | ||||
Company | First Horizon Corporation | ||||
Corporation | First Horizon Corporation | ||||
CRA | Community Reinvestment Act | ||||
CRE | Commercial Real Estate | ||||
CRMC | Credit Risk Management Committee | ||||
DTA | Deferred tax asset | ||||
DTL | Deferred tax liability | ||||
EAD | Exposure as default | ||||
ECP | Equity Compensation Plan | ||||
EPS | Earnings per share | ||||
Fannie Mae | Federal National Mortgage Association | ||||
FASB | Financial Accounting Standards Board | ||||
FDIC | Federal Deposit Insurance Corporation | ||||
Federal Reserve | Federal Reserve Board | ||||
Fed | Federal Reserve Board | ||||
FHA | Federal Housing Administration | ||||
FHLB | Federal Home Loan Bank | ||||
FHN | First Horizon Corporation | ||||
FHNF | FHN Financial; FHN's fixed income division | ||||
FICO | Fair Isaac Corporation | ||||
First Horizon | First Horizon Corporation | ||||
FRB | Federal Reserve Bank or the Federal Reserve Board | ||||
Freddie Mac | Federal Home Loan Mortgage Corporation | ||||
FTE | Fully taxable equivalent | ||||
FTRESC | FT Real Estate Securities Company, Inc. | ||||
GAAP | Generally accepted accounting principles | ||||
GSE | Government sponsored enterprises, in this filing references Fannie Mae and Freddie Mac | ||||
HELOC | Home equity line of credit | ||||
HFS | Held for sale | ||||
HTM | Held to maturity | ||||
IBKC | IBERIABANK Corporation | ||||
IBKC merger | FHN's merger of equals with IBKC that closed July 2020 | ||||
ISDA | International Swap and Derivatives Association | ||||
IRS | Internal Revenue Service | ||||
LGD | Loss given default | ||||
LIBOR | London Inter-Bank Offered Rate | ||||
LIHTC | Low Income Housing Tax Credit | ||||
LLC | Limited Liability Company | ||||
LMC | Loans to mortgage companies |
LOCOM | Lower of cost or market | ||||
LRRD | Loan Rehab and Recovery Department | ||||
LTV | Loan-to-value | ||||
MBS | Mortgage-backed securities | ||||
MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
NAICS | North American Industry Classification System | ||||
NII | Net interest income | ||||
NM | Not meaningful | ||||
NMTC | New Markets Tax Credit | ||||
NPA | Nonperforming asset | ||||
Non-PCD | Non-Purchased Credit Deteriorated Financial Assets | ||||
NPL | Nonperforming loan | ||||
OREO | Other Real Estate-owned | ||||
PCAOB | Public Company Accounting Oversight Board | ||||
PCD | Purchased Credit Deteriorated Financial Assets | ||||
PCI | Purchased credit impaired | ||||
PD | Probability of default | ||||
PM | Portfolio managers | ||||
PPP | Paycheck Protection Program | ||||
PSU | Performance Stock Unit | ||||
RE | Real estate | ||||
RM | Relationship managers | ||||
ROA | Return on Assets | ||||
ROU | Right of use | ||||
RPL | Reasonably possible loss | ||||
SBA | Small Business Administration | ||||
SEC | Securities and Exchange Commission | ||||
SOFR | Secure Overnight Funding Rate | ||||
SVaR | Stressed Value-at-Risk | ||||
TD | The Toronto-Dominion Bank | ||||
TDBNA | TD Bank, N.A. | ||||
TD-US | TD Bank US Holding Company | ||||
TD Merger Agreement | Merger agreement between FHN, TD, TD-US, and a TD-US subsidiary | ||||
Pending TD Merger | The merger transactions contemplated by the TD Merger Agreement | ||||
Bank Merger Agreement | Merger agreement providing for the merger of the Bank into TDBNA | ||||
TDR | Troubled Debt Restructuring | ||||
TRUP | Trust preferred loan | ||||
UPB | Unpaid principal balance | ||||
USDA | United States Department of Agriculture | ||||
VaR | Value-at-Risk | ||||
VIE | Variable Interest Entities | ||||
we/us/our | First Horizon Corporation |
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EXECUTIVE SUMMARY OF PRINCIPAL INVESTMENT RISKS | ||||||||
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EXECUTIVE SUMMARY OF PRINCIPAL INVESTMENT RISKS | ||||||||
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FORWARD-LOOKING STATEMENTS | ||||||||
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FORWARD-LOOKING STATEMENTS | ||||||||
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ITEM 1. BUSINESS | ||||||||
PART I |
Businesses | Principal Brands | ||||
Banking & financial services generally | First Horizon & First Horizon Bank | ||||
Fixed income / capital markets | FHN Financial | ||||
Mortgage lending | First Horizon Bank | ||||
Insurance brokerage & management services | First Horizon Advisors | ||||
Wealth management & brokerage services | First Horizon Advisors |
State | # | State | # | |||||||||||
Tennessee | 135 | Georgia | 12 | |||||||||||
North Carolina | 79 | South Carolina | 10 | |||||||||||
Florida | 76 | Texas | 8 | |||||||||||
Louisiana | 56 | Virginia | 8 | |||||||||||
Alabama | 13 | Mississippi | 4 | |||||||||||
Arkansas | 12 | New York | 1 |
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ITEM 1. BUSINESS | ||||||||
Loans1 | Deposits2 | |||||||||||||
Commercial | 78 | % | Savings | 35 | % | |||||||||
Consumer | 22 | % | Time deposits | 4 | % | |||||||||
Commercial Portfolios | Other interest | 22 | % | |||||||||||
C&I | 71 | % | Noninterest | 39 | % | |||||||||
CRE | 29 | % | ||||||||||||
Consumer Portfolios | ||||||||||||||
Real estate | 94 | % | ||||||||||||
Credit card/other | 6 | % |
Finance & Insurance | 13 | % | ||||||
Real estate rental & leasing | 10 | % | ||||||
Health care & social assistance | 8 | % | ||||||
Mortgage lending companies | 7 | % | ||||||
Accommodation & food service | 7 | % | ||||||
Manufacturing | 7 | % | ||||||
Wholesale trade | 7 | % | ||||||
Retail trade | 6 | % | ||||||
Other C&I | 35 | % |
C&I Loans ($32B)1 | CRE Loans ($13B)1 | Consumer RE Loans ($12B)1 | |||||||||||||||||||||
Tennessee | 21 | % | Florida | 25 | % | Florida | 30 | % | |||||||||||||||
Florida | 13 | % | Texas | 12 | % | Tennessee | 22 | % | |||||||||||||||
Texas | 11 | % | North Carolina | 11 | % | Louisiana | 9 | % | |||||||||||||||
North Carolina | 7 | % | Georgia | 10 | % | Texas | 9 | % | |||||||||||||||
Louisiana | 7 | % | Louisiana | 9 | % | North Carolina | 7 | % | |||||||||||||||
California | 5 | % | Tennessee | 9 | % | New York | 5 | % | |||||||||||||||
Georgia | 5 | % | All other states | 24 | % | All other states | 18 | % | |||||||||||||||
All other states | 31 | % |
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ITEM 1. BUSINESS | ||||||||
(Dollars in millions) | Regional | Specialty | |||||||||
2022 Average assets | $ | 42,295 | $ | 19,967 | |||||||
2022 Net interest income | $ | 1,954 | $ | 557 | |||||||
2022 Noninterest income | $ | 444 | $ | 311 | |||||||
2022 Pretax income | $ | 1,070 | $ | 414 |
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ITEM 1. BUSINESS | ||||||||
2022 | 2021 | 2020 | 2019 | 2018 | |||||||||||||
Net interest income | $ | 2,392 | $ | 1,994 | $ | 1,662 | $ | 1,210 | $ | 1,220 | |||||||
Provision for credit losses | 95 | (310) | 503 | 45 | 8 | ||||||||||||
Noninterest income | 815 | 1,076 | 1,492 | 654 | 723 | ||||||||||||
Net income available to common shareholders | 868 | 962 | 822 | 435 | 539 | ||||||||||||
Total loans and leases | 58,102 | 54,859 | 58,232 | 31,061 | 27,536 | ||||||||||||
Total assets | 78,953 | 89,092 | 84,209 | 43,311 | 40,832 | ||||||||||||
Total deposits | 63,489 | 74,895 | 69,982 | 32,430 | 32,683 | ||||||||||||
Total term borrowings | 1,597 | 1,590 | 1,670 | 791 | 1,171 | ||||||||||||
Total liabilities | 70,406 | 80,598 | 75,902 | 38,235 | 36,047 | ||||||||||||
Preferred stock | 1,014 | 520 | 470 | 96 | 96 | ||||||||||||
Total shareholders’ equity | 8,547 | 8,494 | 8,307 | 5,076 | 4,785 |
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
Federal Reserve Policy Phase | |||||||||||
Tightening | Neutral | Easing | |||||||||
Fixed Income Performance Tends to be | Weaker | Average | Stronger |
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ITEM 1. BUSINESS | ||||||||
Driver | If Driver Is: | FI Revenues Tend to Be: | ||||||
Interest rates | Rising | Lower | ||||||
Falling | Higher | |||||||
Market volatility | Low | Lower | ||||||
Moderate | Higher | |||||||
Yield curve | Flatter | Lower | ||||||
Steeper | Higher | |||||||
Credit spreads | Narrower | Lower | ||||||
Wider | Higher | |||||||
Economy outlook | Positive | Lower | ||||||
Negative | Higher |
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
Well capitalized | •Common Equity Tier 1 Capital ratio of at least 6.5% •Tier 1 Capital ratio of at least 8% •Total Capital ratio of at least 10% •Leverage ratio of at least 5% •Not subject to a directive, order, or written agreement to meet and maintain specific capital levels | ||||
Adequately capitalized | •Common Equity Tier 1 Capital ratio of at least 4.5% •Tier 1 Capital ratio of at least 6% •Total Capital ratio of at least 8% •Leverage ratio of at least 4% •Not subject to a directive, order, or written agreement to meet and maintain specific capital levels | ||||
Undercapitalized | Failure to maintain any requirement to be adequately capitalized | ||||
Significantly Undercapitalized | Failure to maintain Common Equity Tier 1 Capital ratio of at least 3%, Tier 1 Capital ratio of at least 4%, Total Capital ratio of at least 6%, or a Leverage ratio of at least 3% | ||||
Critically Undercapitalized | Failure to maintain a level of tangible equity equal to at least 2% of total assets |
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1. BUSINESS | ||||||||
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ITEM 1A. RISK FACTORS | ||||||||
Topic | Page | Topic | Page | |||||||||||||||||
Risks related to the Pending TD Merger | Risks of Expense Control | |||||||||||||||||||
Traditional Competition Risks | Geographic Risks | |||||||||||||||||||
Traditional Strategic & Macro Risks | Insurance | |||||||||||||||||||
Industry Disruption | Liquidity & Funding Risks | |||||||||||||||||||
Operational Risks | Credit Ratings | |||||||||||||||||||
Risks from Economic Downturns & Changes | Interest Rate & Yield Curve Risks | |||||||||||||||||||
Risks Associated with Monetary Events | Asset Inventories & Market Risks | |||||||||||||||||||
Risks Related to Businesses We May Exit | Mortgage Business Risks | |||||||||||||||||||
Reputation Risks | Pre-2009 Mortgage Business Risks | |||||||||||||||||||
Credit Risks | Accounting & Tax Risks | |||||||||||||||||||
Service Risks | Share Owning & Governance Risks | |||||||||||||||||||
Regulatory, Legislative, and Legal Risks |
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ITEM 1A. RISK FACTORS | ||||||||
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ITEM 1A. RISK FACTORS | ||||||||
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ITEM 1B. UNRESOLVED STAFF COMMENTS AND ITEM 2. PROPERTIES | ||||||||
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SUPPLEMENTAL PART I INFORMATION | ||||||||
Name & Age | Current (Year First Elected to Office) and Recent Offices & Positions | ||||
Terry L. Akins Age: 59 | Senior Executive Vice President—Chief Risk Officer of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Ms. Akins assumed the role of Senior Executive Vice President—Chief Risk Officer of First Horizon and the Bank. Prior to the merger, she had several roles with IBERIABANK Corporation and IBERIABANK starting in 2002, the most recent of which was Senior Executive Vice President and Chief Risk Officer (2017-2020). | ||||
Elizabeth A. Ardoin Age: 53 | Senior Executive Vice President—Chief Communications Officer of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Ms. Ardoin assumed the role of Senior Executive Vice President—Chief Communications Officer of First Horizon and the Bank. Prior to the merger, she had several roles with IBERIABANK Corporation and IBERIABANK starting in 2002, the most recent of which was Senior Executive Vice President and Director of Communications (2002-2020), which included marketing, public relations, human resources, and corporate real estate, and she served as chief of staff to the CEO. | ||||
Hope Dmuchowski Age: 44 Principal Financial Officer | Senior Executive Vice President—Chief Financial Officer of First Horizon & the Bank (2021) Ms. Dmuchowski was elected to her current position in November 2021. Previously, she was Executive Vice President, Head of Financial Planning and Analysis and Management Reporting for Truist Financial Corp. (Sept.-Nov. 2021); Executive Vice President, Chief Financial Officer Corporate Banking, Commercial Banking and Corporate Groups for Truist (2019-2021); Executive Vice President, Chief Financial Officer Group Director for BB&T Corp. (2017-2019); and Sr. Vice President, Chief Financial and Operations Officer—Enterprise Operations Services for BB&T (2013-2017). Her career with BB&T, a predecessor of Truist, started in 2007. | ||||
Jeff L. Fleming Age: 61 Principal Accounting Officer | Executive Vice President—Chief Accounting Officer and Corporate Controller of First Horizon & the Bank (2012) Mr. Fleming assumed the role of Executive Vice President—Chief Accounting Officer and Corporate Controller in 2012. Previously, starting in 1984, he held several positions with us, most recently (before his current role) Executive Vice President—Corporate Controller (2010-2011). | ||||
D. Bryan Jordan Age: 61 Principal Executive Officer | President and Chief Executive Officer (2008) and Chairman of the Board (2012-2020 and since 2022) of First Horizon & the Bank Mr. Jordan became President and Chief Executive Officer in 2008. He was Chairman of the Board from 2012 until we closed the merger of equals between First Horizon and IBKC in 2020. He resumed being Chairman in 2022 on the second anniversary of the IBKC merger. From 2007 until 2008 Mr. Jordan was Executive Vice President and Chief Financial Officer of First Horizon and the Bank. From 2000 until 2002 Mr. Jordan was Comptroller, and from 2002 until 2007 Mr. Jordan was Chief Financial Officer, of Regions Financial Corp. During that time he was also an Executive Vice President and a Senior Executive Vice President of Regions. | ||||
Tammy S. LoCascio Age: 54 | Senior Executive Vice President—Chief Operating Officer of First Horizon & the Bank (2021) Following the closing of the merger of equals between First Horizon and IBKC in 2020, Ms. LoCascio assumed the role of Senior Executive Vice President—Chief Human Resources Officer of First Horizon and the Bank. Prior to the merger, starting in 2011, she served in several roles with the Bank, most recently Executive Vice President—Consumer Banking (2017-2020). In that role she led the retail, private client/wealth management, mortgage, and small business units. |
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SUPPLEMENTAL PART I INFORMATION | ||||||||
Name & Age | Current (Year First Elected to Office) and Recent Offices & Positions | ||||
David T. Popwell Age: 63 | President—Specialty Banking of First Horizon & the Bank (2020) Following the closing of the merger of equals between First Horizon and IBKC, Mr. Popwell assumed the role of President—Specialty Banking of First Horizon and the Bank. Prior to the merger, starting in 2007, he served in several roles, the most recent of which (before his current role) was President—Regional Banking (2013-2020). From 2004 to 2007 Mr. Popwell was President of SunTrust Bank—Memphis, and prior to that was an Executive Vice President of National Commerce Financial Corp. | ||||
Anthony J. Restel Age: 53 | President—Regional Banking of First Horizon & the Bank (2021) Following the closing of the merger of equals between First Horizon and IBKC in 2020, Mr. Restel assumed the role of Senior Executive Vice President—Chief Operating Officer of First Horizon and the Bank. From July to November 2021, Mr. Restel also acted as interim Chief Financial Officer. Prior to the merger, he had several roles with IBERIABANK Corporation and IBERIABANK starting in 2001, the most recent of which was Vice Chairman and Chief Financial Officer (2005-2020). During his tenure as Chief Financial Officer, Mr. Restel also served as Chief Credit Officer of IBERIABANK (2007-2009). | ||||
Susan L. Springfield Age: 58 | Senior Executive Vice President—Chief Credit Officer of First Horizon & the Bank (2013) Ms. Springfield assumed the role of Executive Vice President—Chief Credit Officer of First Horizon & the Bank in 2013, with “Senior” added to her title in 2020. Previously, starting in 1998, she served the Bank in several roles, the most recent of which (before her current role) was Executive Vice President—Commercial Banking (2011-2013). |
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ITEM 5. MARKET FOR COMMON EQUITY, STOCKHOLDER MATTERS, & EQUITY PURCHASES AND ITEM 6. | ||||||||
PART II |
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ITEM 5. MARKET FOR COMMON EQUITY, STOCKHOLDER MATTERS, & EQUITY PURCHASES AND ITEM 6. | ||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||
First Horizon Corporation | $ | 100.00 | $ | 67.66 | $ | 88.25 | $ | 72.21 | $ | 95.77 | $ | 147.43 | ||||||||
S&P 500 Index | 100.00 | 95.61 | 125.70 | 148.81 | 191.48 | 156.77 | ||||||||||||||
KBW Nasdaq Bank Index (BKX) | 100.00 | 82.29 | 112.01 | 100.47 | 138.99 | 109.25 | ||||||||||||||
KBW Regional Bank Index (KRX) | 100.00 | 82.51 | 102.20 | 93.33 | 127.53 | 118.71 |
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
For the years ended December 31, | |||||||||||||||||
(Dollars in millions, except per share data) | 2022 | 2021 | 2020 | ||||||||||||||
Pre-provision net revenue (a) | $ | 1,254 | $ | 974 | $ | 1,436 | |||||||||||
Diluted earnings per common share | $ | 1.53 | $ | 1.74 | $ | 1.89 | |||||||||||
Return on average assets (b) | 1.08 | % | 1.15 | % | 1.33 | % | |||||||||||
Return on average common equity (c) | 11.81 | % | 12.53 | % | 13.66 | % | |||||||||||
Return on average tangible common equity (a) (d) | 15.58 | % | 16.46 | % | 19.03 | % | |||||||||||
Net interest margin (e) | 3.10 | % | 2.48 | % | 2.86 | % | |||||||||||
Noninterest income to total revenue (f) | 24.99 | % | 34.77 | % | 47.41 | % | |||||||||||
Efficiency ratio (g) | 61.24 | % | 68.56 | % | 54.37 | % | |||||||||||
Allowance for loan and lease losses to total loans and leases | 1.18 | % | 1.22 | % | 1.65 | % | |||||||||||
Net charge-offs (recoveries) to average loans and leases | 0.11 | % | — | % | 0.26 | % | |||||||||||
Total period-end equity to period-end assets | 10.83 | % | 9.53 | % | 9.86 | % | |||||||||||
Tangible common equity to tangible assets (a) | 7.12 | % | 6.73 | % | 6.89 | % | |||||||||||
Cash dividends declared per common share | $ | 0.60 | $ | 0.60 | $ | 0.60 | |||||||||||
Book value per common share | $ | 13.48 | $ | 14.39 | $ | 13.59 | |||||||||||
Tangible book value per common share (a) | $ | 10.23 | $ | 11.00 | $ | 10.23 | |||||||||||
Common equity Tier 1 | 10.17 | % | 9.92 | % | 9.68 | % | |||||||||||
Market capitalization | $ | 13,159 | $ | 8,713 | $ | 7,082 |
60 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
61 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Average Balance | Interest Income/Expense | Yield/Rate | Average Balance | Interest Income/Expense | Yield/Rate | Average Balance | Interest Income/Expense | Yield/Rate | |||||||||||||||||||||||||||||||||||||||||||||||
Loans and leases: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial loans and leases | $ | 43,691 | $ | 1,823 | 4.18 | % | $ | 44,325 | $ | 1,498 | 3.38 | % | $ | 36,146 | $ | 1,324 | 3.66 | % | ||||||||||||||||||||||||||||||||||||||
Consumer loans | 12,261 | 479 | 3.89 | 11,973 | 469 | 3.92 | 10,037 | 407 | 4.05 | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases | 55,952 | 2,302 | 4.11 | 56,298 | 1,967 | 3.49 | 46,183 | 1,731 | 3.75 | |||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale | 884 | 39 | 4.41 | 956 | 33 | 3.44 | 835 | 30 | 3.60 | |||||||||||||||||||||||||||||||||||||||||||||||
Investment securities | 9,976 | 200 | 2.01 | 8,623 | 123 | 1.43 | 6,464 | 106 | 1.64 | |||||||||||||||||||||||||||||||||||||||||||||||
Trading securities | 1,438 | 58 | 4.04 | 1,366 | 30 | 2.17 | 1,433 | 35 | 2.44 | |||||||||||||||||||||||||||||||||||||||||||||||
Federal funds sold | 191 | 4 | 2.09 | 37 | — | 0.15 | 42 | — | 0.21 | |||||||||||||||||||||||||||||||||||||||||||||||
Securities purchased under agreements to resell (a) | 522 | 6 | 1.12 | 584 | — | (0.09) | 505 | 2 | 0.45 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | 8,672 | 87 | 1.00 | 13,123 | 17 | 0.13 | 3,006 | 5 | 0.14 | |||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets / Total interest income | $ | 77,635 | $ | 2,696 | 3.47 | % | $ | 80,987 | $ | 2,170 | 2.68 | % | $ | 58,468 | $ | 1,909 | 3.26 | % | ||||||||||||||||||||||||||||||||||||||
Cash and due from banks | 1,217 | 1,261 | 852 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net | 1,777 | 1,836 | 1,696 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and equipment, net | 636 | 712 | 604 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | (648) | (834) | (700) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other assets | 3,600 | 3,647 | 3,426 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 84,217 | $ | 87,609 | $ | 64,346 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Savings | $ | 24,292 | $ | 94 | 0.39 | % | $ | 27,283 | $ | 36 | 0.13 | % | $ | 19,780 | $ | 82 | 0.41 | % | ||||||||||||||||||||||||||||||||||||||
Other interest-bearing deposits | 15,641 | 72 | 0.47 | 15,688 | 20 | 0.13 | 11,973 | 31 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||
Time deposits | 2,963 | 18 | 0.60 | 4,281 | 25 | 0.57 | 4,347 | 39 | 0.90 | |||||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 42,896 | 184 | 0.43 | 47,252 | 81 | 0.17 | 36,100 | 152 | 0.42 | |||||||||||||||||||||||||||||||||||||||||||||||
Federal funds purchased | 699 | 11 | 1.56 | 949 | 1 | 0.12 | 862 | 3 | 0.34 | |||||||||||||||||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 881 | 7 | 0.77 | 1,235 | 4 | 0.30 | 1,109 | 6 | 0.50 | |||||||||||||||||||||||||||||||||||||||||||||||
Trading liabilities | 480 | 12 | 2.56 | 540 | 6 | 1.11 | 457 | 6 | 1.24 | |||||||||||||||||||||||||||||||||||||||||||||||
Other short-term borrowings | 229 | 5 | 2.26 | 124 | — | 0.09 | 626 | 5 | 0.84 | |||||||||||||||||||||||||||||||||||||||||||||||
Term borrowings | 1,596 | 72 | 4.51 | 1,645 | 72 | 4.37 | 1,578 | 64 | 4.02 | |||||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities / Total interest expense | $ | 46,781 | $ | 291 | 0.62 | % | $ | 51,745 | $ | 164 | 0.32 | % | $ | 40,732 | $ | 236 | 0.58 | % | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 26,851 | 25,879 | 15,779 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 2,006 | 1,506 | 1,226 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 75,638 | 79,130 | 57,737 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | 8,284 | 8,184 | 6,314 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest | 295 | 295 | 295 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total shareholders' equity | 8,579 | 8,479 | 6,609 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 84,217 | $ | 87,609 | $ | 64,346 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net earnings assets / Net interest income (TE) / Net interest spread | $ | 30,854 | $ | 2,405 | 2.85 | % | $ | 29,242 | $ | 2,006 | 2.36 | % | $ | 17,736 | $ | 1,673 | 2.68 | % | ||||||||||||||||||||||||||||||||||||||
Taxable equivalent adjustment | (13) | 0.25 | (12) | 0.12 | (11) | 0.18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income / Net interest margin (b) | $ | 2,392 | 3.10 | % | $ | 1,994 | 2.48 | % | $ | 1,662 | 2.86 | % | ||||||||||||||||||||||||||||||||||||||||||||
62 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
2022 Compared to 2021 | 2021 Compared to 2020 | |||||||||||||||||||||||||||||||||||||
Increase (Decrease) Due to (a) | Increase (Decrease) Due to (a) | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Rate (b) | Volume (b) | Total | Rate (b) | Volume (b) | Total | ||||||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||||||||||||
Loans and leases | $ | 347 | $ | (12) | $ | 335 | $ | (119) | $ | 354 | $ | 235 | ||||||||||||||||||||||||||
Loans held for sale | 9 | (3) | 6 | (1) | 4 | 3 | ||||||||||||||||||||||||||||||||
Investment securities | 56 | 21 | 77 | (15) | 31 | 16 | ||||||||||||||||||||||||||||||||
Trading securities | 27 | 1 | 28 | (4) | (1) | (5) | ||||||||||||||||||||||||||||||||
Other earning assets: | ||||||||||||||||||||||||||||||||||||||
Federal funds sold | 3 | 1 | 4 | — | — | — | ||||||||||||||||||||||||||||||||
Securities purchased under agreements to resell | 6 | — | 6 | (3) | 1 | (2) | ||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | 77 | (8) | 69 | — | 13 | 13 | ||||||||||||||||||||||||||||||||
Total other earning assets | 86 | (7) | 79 | (3) | 14 | 11 | ||||||||||||||||||||||||||||||||
Total change in interest income - earning assets | $ | 525 | $ | — | $ | 525 | $ | (142) | $ | 402 | $ | 260 | ||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||
Savings | $ | 63 | $ | (5) | $ | 58 | $ | (69) | $ | 23 | $ | (46) | ||||||||||||||||||||||||||
Time deposits | 1 | (8) | (7) | (14) | — | (14) | ||||||||||||||||||||||||||||||||
Other interest-bearing deposits | 53 | (1) | 52 | (19) | 8 | (11) | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 117 | (14) | 103 | (102) | 31 | (71) | ||||||||||||||||||||||||||||||||
Federal funds purchased | 10 | — | 10 | (2) | — | (2) | ||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 4 | (1) | 3 | (3) | — | (3) | ||||||||||||||||||||||||||||||||
Trading liabilities | 7 | (1) | 6 | (1) | 1 | — | ||||||||||||||||||||||||||||||||
Other short-term borrowings | 5 | — | 5 | 1 | (5) | (4) | ||||||||||||||||||||||||||||||||
Term borrowings | 2 | (2) | — | 5 | 3 | 8 | ||||||||||||||||||||||||||||||||
Total change in interest expense - interest-bearing liabilities | 145 | (18) | 127 | (102) | 30 | (72) | ||||||||||||||||||||||||||||||||
Net interest income | $ | 380 | $ | 18 | $ | 398 | $ | (40) | $ | 372 | $ | 332 | ||||||||||||||||||||||||||
63 | 2022 FORM 10-K ANNUAL REPORT |
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2022 vs. 2021 | 2021 vs. 2020 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||||
Noninterest income | ||||||||||||||||||||||||||||||||||||||||||||
Fixed income | $ | 205 | $ | 406 | $ | 423 | $ | (201) | (50) | % | $ | (17) | (4) | % | ||||||||||||||||||||||||||||||
Deposit transactions and cash management | 171 | 175 | 148 | (4) | (2) | 27 | 18 | |||||||||||||||||||||||||||||||||||||
Brokerage, management fees and commissions | 92 | 88 | 66 | 4 | 5 | 22 | 33 | |||||||||||||||||||||||||||||||||||||
Card and digital banking fees | 84 | 78 | 60 | 6 | 8 | 18 | 30 | |||||||||||||||||||||||||||||||||||||
Mortgage banking and title income | 68 | 154 | 129 | (86) | (56) | 25 | 19 | |||||||||||||||||||||||||||||||||||||
Other service charges and fees | 54 | 44 | 26 | 10 | 23 | 18 | 69 | |||||||||||||||||||||||||||||||||||||
Trust services and investment management | 48 | 51 | 39 | (3) | (6) | 12 | 31 | |||||||||||||||||||||||||||||||||||||
Securities gains (losses), net | 18 | 13 | (6) | 5 | 38 | 19 | NM | |||||||||||||||||||||||||||||||||||||
Purchase accounting gain | — | (1) | 533 | 1 | 100 | (534) | 100 | |||||||||||||||||||||||||||||||||||||
Other income | 75 | 68 | 74 | 7 | 10 | (6) | (8) | |||||||||||||||||||||||||||||||||||||
Total noninterest income | $ | 815 | $ | 1,076 | $ | 1,492 | $ | (261) | (24) | % | $ | (416) | (28) | % | ||||||||||||||||||||||||||||||
64 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
2022 vs. 2021 | 2021 vs. 2020 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||||
Noninterest expense | ||||||||||||||||||||||||||||||||||||||||||||
Personnel expense | $ | 1,101 | $ | 1,210 | $ | 1,033 | $ | (109) | (9) | % | $ | 177 | 17 | % | ||||||||||||||||||||||||||||||
Net occupancy expense | 128 | 137 | 116 | (9) | (7) | 21 | 18 | |||||||||||||||||||||||||||||||||||||
Computer software | 113 | 116 | 85 | (3) | (3) | 31 | 36 | |||||||||||||||||||||||||||||||||||||
Operations services | 87 | 80 | 56 | 7 | 9 | 24 | 43 | |||||||||||||||||||||||||||||||||||||
Legal and professional fees | 62 | 68 | 84 | (6) | (9) | (16) | (19) | |||||||||||||||||||||||||||||||||||||
Contract employment and outsourcing | 54 | 67 | 24 | (13) | (19) | 43 | NM | |||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 51 | 56 | 40 | (5) | (9) | 16 | 40 | |||||||||||||||||||||||||||||||||||||
Advertising and public relations | 50 | 37 | 18 | 13 | 35 | 19 | NM | |||||||||||||||||||||||||||||||||||||
Equipment expense | 45 | 47 | 42 | (2) | (4) | 5 | 12 | |||||||||||||||||||||||||||||||||||||
Communications and delivery | 37 | 37 | 31 | — | — | 6 | 19 | |||||||||||||||||||||||||||||||||||||
Contributions | 7 | 14 | 41 | (7) | (50) | (27) | (66) | |||||||||||||||||||||||||||||||||||||
Impairment of long-lived assets | — | 34 | 7 | (34) | (100) | 27 | NM | |||||||||||||||||||||||||||||||||||||
Other expense | 218 | 193 | 141 | 25 | 13 | 52 | 37 | |||||||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 1,953 | $ | 2,096 | $ | 1,718 | $ | (143) | (7) | % | $ | 378 | 22 | % | ||||||||||||||||||||||||||||||
65 | 2022 FORM 10-K ANNUAL REPORT |
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
2022 | 2021 | ||||||||||||||||||||||
(Dollars in millions) | Balance | Mix | Balance | Mix | |||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||
Government agency issued MBS and CMO | $ | 7,076 | 69 | % | $ | 7,312 | 78 | % | |||||||||||||||
Other U.S. government agencies (a) | 1,163 | 12 | 850 | 9 | |||||||||||||||||||
States and municipalities | 597 | 6 | 545 | 6 | |||||||||||||||||||
Total securities available for sale | $ | 8,836 | 87 | % | $ | 8,707 | 93 | % | |||||||||||||||
Securities held to maturity: | |||||||||||||||||||||||
Government agency issued MBS and CMO | $ | 1,371 | 13 | % | $ | 712 | 7 | % | |||||||||||||||
Total investment securities | $ | 10,207 | 100 | % | $ | 9,419 | 100 | % | |||||||||||||||
67 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
After 1 year | After 5 years | |||||||||||||||||||||||||||||||||||||||||||||||||
Within 1 year | Within 5 years | Within 10 years | After 10 years | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Amount | Yield (b) | Amount | Yield (b) | Amount | Yield (b) | Amount | Yield (b) | ||||||||||||||||||||||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Government agency issued MBS and CMO (a) | $ | 17 | 2.53 | % | $ | 702 | 1.80 | % | $ | 1,217 | 1.87 | % | $ | 6,203 | 2.04 | % | ||||||||||||||||||||||||||||||||||
Other U.S. government agencies | 30 | 2.51 | 13 | 1.44 | 234 | 1.97 | 1,048 | 2.74 | ||||||||||||||||||||||||||||||||||||||||||
States and municipalities | 13 | 0.38 | 107 | 0.82 | 160 | 1.62 | 378 | 2.90 | ||||||||||||||||||||||||||||||||||||||||||
Total securities available for sale | $ | 60 | 2.05 | % | $ | 822 | 1.67 | % | $ | 1,611 | 1.86 | % | $ | 7,629 | 2.18 | % | ||||||||||||||||||||||||||||||||||
Securities held to maturity: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Government agency issued MBS and CMO (a) | $ | — | — | % | $ | 50 | 3.34 | % | $ | 265 | 3.52 | % | $ | 1,056 | 2.78 | % | ||||||||||||||||||||||||||||||||||
Total securities held to maturity | $ | — | — | % | $ | 50 | 3.34 | % | $ | 265 | 3.52 | % | $ | 1,056 | 2.78 | % | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | Percent of total | 2022 Growth Rate | 2021 | Percent of total | 2021 Growth Rate | 2020 | Percent of total | 2020 Growth Rate (b) | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, and industrial (a) | $ | 31,781 | 55 | % | 2 | % | $ | 31,068 | 57 | % | (6) | % | $ | 33,104 | 57 | % | 65 | % | ||||||||||||||||||||||||||||||||||||||
Commercial real estate | 13,228 | 23 | 9 | 12,109 | 22 | (1) | 12,275 | 21 | 183 | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial | 45,009 | 78 | 4 | 43,177 | 79 | (5) | 45,379 | 78 | 86 | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer real estate | 12,253 | 21 | 14 | 10,772 | 20 | (8) | 11,725 | 20 | 90 | |||||||||||||||||||||||||||||||||||||||||||||||
Credit card and other | 840 | 1 | (8) | 910 | 1 | (19) | 1,128 | 2 | 127 | |||||||||||||||||||||||||||||||||||||||||||||||
Total consumer | 13,093 | 22 | 12 | 11,682 | 21 | (9) | 12,853 | 22 | 93 | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 58,102 | 100 | % | 6 | % | $ | 54,859 | 100 | % | (6) | % | $ | 58,232 | 100 | % | 87 | % | ||||||||||||||||||||||||||||||||||||||
68 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in millions) | Within 1 Year | After 1 Year Within 5 Years | After 5 Years Within 15 Years | After 15 Years | Total | ||||||||||||||||||||||||
Commercial, financial, and industrial | $ | 6,282 | $ | 16,626 | $ | 7,947 | $ | 926 | $ | 31,781 | |||||||||||||||||||
Commercial real estate | 2,013 | 7,753 | 3,418 | 44 | 13,228 | ||||||||||||||||||||||||
Consumer real estate | 93 | 315 | 1,579 | 10,266 | 12,253 | ||||||||||||||||||||||||
Credit card and other | 264 | 357 | 69 | 150 | 840 | ||||||||||||||||||||||||
Total loans and leases | $ | 8,652 | $ | 25,051 | $ | 13,013 | $ | 11,386 | $ | 58,102 | |||||||||||||||||||
For maturities over one year at fixed interest rates: | |||||||||||||||||||||||||||||
Commercial, financial, and industrial | $ | 3,802 | $ | 5,018 | $ | 703 | $ | 9,523 | |||||||||||||||||||||
Commercial real estate | 2,148 | 1,347 | 39 | 3,534 | |||||||||||||||||||||||||
Consumer real estate | 224 | 1,350 | 3,393 | 4,967 | |||||||||||||||||||||||||
Credit card and other | 81 | 53 | 126 | 260 | |||||||||||||||||||||||||
Total loans and leases at fixed interest rates | $ | 6,255 | $ | 7,768 | $ | 4,261 | $ | 18,284 | |||||||||||||||||||||
For maturities over one year at floating interest rates: | |||||||||||||||||||||||||||||
Commercial, financial, and industrial | $ | 12,824 | $ | 2,929 | $ | 223 | $ | 15,976 | |||||||||||||||||||||
Commercial real estate | 5,605 | 2,071 | 5 | 7,681 | |||||||||||||||||||||||||
Consumer real estate | 91 | 229 | 6,873 | 7,193 | |||||||||||||||||||||||||
Credit card and other | 276 | 16 | 24 | 316 | |||||||||||||||||||||||||
Total loans and leases at floating interest rates | $ | 18,796 | $ | 5,245 | $ | 7,125 | $ | 31,166 | |||||||||||||||||||||
Total maturities over one year | $ | 25,051 | $ | 13,013 | $ | 11,386 | $ | 49,450 | |||||||||||||||||||||
69 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
(Dollars in millions) | Amount | Percent | Amount | Percent | ||||||||||||||||||||||
Industry: | ||||||||||||||||||||||||||
Finance and insurance | $ | 4,120 | 13 | % | $ | 3,483 | 11 | % | ||||||||||||||||||
Real estate rental & leasing (a) | 3,277 | 10 | 2,771 | 9 | ||||||||||||||||||||||
Health care and social assistance | 2,657 | 8 | 2,413 | 8 | ||||||||||||||||||||||
Loans to mortgage companies | 2,258 | 7 | 4,518 | 15 | ||||||||||||||||||||||
Accommodation & food service | 2,238 | 7 | 2,221 | 7 | ||||||||||||||||||||||
Wholesale trade | 2,212 | 7 | 1,845 | 6 | ||||||||||||||||||||||
Manufacturing | 2,206 | 7 | 1,950 | 6 | ||||||||||||||||||||||
Retail trade | 1,835 | 6 | 1,532 | 5 | ||||||||||||||||||||||
Energy | 1,364 | 4 | 1,325 | 4 | ||||||||||||||||||||||
Other (professional, construction, transportation, etc) (b) | 9,614 | 31 | 9,010 | 29 | ||||||||||||||||||||||
Total C&I loan portfolio | $ | 31,781 | 100 | % | $ | 31,068 | 100 | % | ||||||||||||||||||
71 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
72 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
73 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
(Dollars in millions) | Repayment Amount | Percent | Repayment Amount | Percent | ||||||||||||||||||||||
Months remaining in draw period: | ||||||||||||||||||||||||||
0-12 | $ | 31 | 2 | % | $ | 43 | 2 | % | ||||||||||||||||||
13-24 | 40 | 2 | 42 | 2 | ||||||||||||||||||||||
25-36 | 109 | 6 | 50 | 3 | ||||||||||||||||||||||
37-48 | 135 | 7 | 136 | 8 | ||||||||||||||||||||||
49-60 | 204 | 11 | 160 | 9 | ||||||||||||||||||||||
>60 | 1,356 | 72 | 1,324 | 76 | ||||||||||||||||||||||
Total | $ | 1,875 | 100 | % | $ | 1,755 | 100 | % | ||||||||||||||||||
74 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31 | |||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||
Allowance for loan and lease losses | |||||||||||||||||||||||
C&I | $ | 308 | $ | 334 | $ | 453 | |||||||||||||||||
CRE | 146 | 154 | 242 | ||||||||||||||||||||
Consumer real estate | 200 | 163 | 242 | ||||||||||||||||||||
Credit card and other | 31 | 19 | 26 | ||||||||||||||||||||
Total allowance for loan and lease losses | $ | 685 | $ | 670 | $ | 963 | |||||||||||||||||
Reserve for remaining unfunded commitments | |||||||||||||||||||||||
C&I | $ | 55 | $ | 46 | $ | 65 | |||||||||||||||||
CRE | 22 | 12 | 10 | ||||||||||||||||||||
Consumer real estate | 10 | 8 | 10 | ||||||||||||||||||||
Credit card and other | — | — | — | ||||||||||||||||||||
Total reserve for remaining unfunded commitments | $ | 87 | $ | 66 | $ | 85 | |||||||||||||||||
Allowance for credit losses | |||||||||||||||||||||||
C&I | $ | 363 | $ | 380 | $ | 518 | |||||||||||||||||
CRE | 168 | 166 | 252 | ||||||||||||||||||||
Consumer real estate | 210 | 171 | 252 | ||||||||||||||||||||
Credit card and other | 31 | 19 | 26 | ||||||||||||||||||||
Total allowance for credit losses | $ | 772 | $ | 736 | $ | 1,048 | |||||||||||||||||
Period-end loans and leases | |||||||||||||||||||||||
C&I | $ | 31,781 | $ | 31,068 | $ | 33,104 | |||||||||||||||||
CRE | 13,228 | 12,109 | 12,275 | ||||||||||||||||||||
Consumer real estate | 12,253 | 10,772 | 11,725 | ||||||||||||||||||||
Credit card and other | 840 | 910 | 1,128 | ||||||||||||||||||||
Total period-end loans and leases | $ | 58,102 | $ | 54,859 | $ | 58,232 | |||||||||||||||||
ALLL / loans and leases % | |||||||||||||||||||||||
C&I | 0.97 | % | 1.07 | % | 1.37 | % | |||||||||||||||||
CRE | 1.10 | 1.27 | 1.97 | ||||||||||||||||||||
Consumer real estate | 1.63 | 1.51 | 2.07 | ||||||||||||||||||||
Credit card and other | 3.72 | 2.14 | 2.34 | ||||||||||||||||||||
Total ALLL / loans and leases % | 1.18 | % | 1.22 | % | 1.65 | % | |||||||||||||||||
ACL / loans and leases % | |||||||||||||||||||||||
C&I | 1.14 | % | 1.22 | % | 1.56 | % | |||||||||||||||||
CRE | 1.27 | 1.37 | 2.05 |
75 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
Consumer real estate | 1.71 | 1.59 | 2.15 | ||||||||||||||||||||
Credit card and other | 3.72 | 2.09 | 2.30 | ||||||||||||||||||||
Total ACL / loans and leases % | 1.33 | % | 1.34 | % | 1.80 | % | |||||||||||||||||
Net charge-offs (recoveries) | |||||||||||||||||||||||
C&I | $ | 53 | $ | 13 | $ | 120 | |||||||||||||||||
CRE | — | — | 1 | ||||||||||||||||||||
Consumer real estate | (14) | (22) | (10) | ||||||||||||||||||||
Credit card and other | 20 | 11 | 9 | ||||||||||||||||||||
Total net charge-offs | $ | 59 | $ | 2 | $ | 120 | |||||||||||||||||
Average loans and leases | |||||||||||||||||||||||
C&I | $ | 30,969 | $ | 32,010 | $ | 27,638 | |||||||||||||||||
CRE | 12,722 | 12,314 | 8,508 | ||||||||||||||||||||
Consumer real estate | 11,397 | 10,969 | 9,191 | ||||||||||||||||||||
Credit card and other | 864 | 1,005 | 846 | ||||||||||||||||||||
Total average loans and leases | $ | 55,952 | $ | 56,298 | $ | 46,183 | |||||||||||||||||
Charge-off % | |||||||||||||||||||||||
C&I | 0.17 | % | 0.04 | % | 0.43 | % | |||||||||||||||||
CRE | — | 0.01 | 0.01 | ||||||||||||||||||||
Consumer real estate | NM | NM | NM | ||||||||||||||||||||
Credit card and other | 2.39 | 1.05 | 1.04 | ||||||||||||||||||||
Total charge-off % | 0.11 | % | — | % | 0.26 | % | |||||||||||||||||
ALLL / net charge-offs | |||||||||||||||||||||||
C&I | 578 | % | 2,645 | % | 376 | % | |||||||||||||||||
CRE | NM | 13,189 | 43,670 | ||||||||||||||||||||
Consumer real estate | NM | NM | NM | ||||||||||||||||||||
Credit card and other | 151 | 185 | 299 | ||||||||||||||||||||
Total ALLL / net charge-offs | 1,155 | % | 30,641 | % | 808 | % | |||||||||||||||||
76 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31 | |||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||
Nonperforming loans and leases | |||||||||||||||||||||||
C&I | $ | 153 | $ | 125 | $ | 144 | |||||||||||||||||
CRE | 9 | 9 | 58 | ||||||||||||||||||||
Consumer real estate | 152 | 138 | 182 | ||||||||||||||||||||
Credit card and other | 2 | 3 | 2 | ||||||||||||||||||||
Total nonperforming loans and leases (a) (c) | $ | 316 | $ | 275 | $ | 386 | |||||||||||||||||
Nonperforming loans held-for-sale (a) | $ | 8 | $ | 7 | $ | 5 | |||||||||||||||||
Foreclosed real estate and other assets (b) | 3 | 3 | 15 | ||||||||||||||||||||
Total nonperforming assets (a) (b) | $ | 327 | $ | 285 | $ | 406 | |||||||||||||||||
Nonperforming loans and leases to total loans and leases | |||||||||||||||||||||||
C&I | 0.48 | % | 0.40 | % | 0.43 | % | |||||||||||||||||
CRE | 0.07 | 0.08 | 0.48 | ||||||||||||||||||||
Consumer real estate | 1.24 | 1.29 | 1.56 | ||||||||||||||||||||
Credit card and other | 0.27 | 0.31 | 0.18 | ||||||||||||||||||||
Total NPL % | 0.54 | % | 0.50 | % | 0.66 | % | |||||||||||||||||
ALLL / NPLs | |||||||||||||||||||||||
C&I | 202 | % | 268 | % | 315 | % | |||||||||||||||||
CRE | 1,554 | 1,671 | 415 | ||||||||||||||||||||
Consumer real estate | 131 | 118 | 133 | ||||||||||||||||||||
Credit card and other | 1,364 | 699 | 1,313 | ||||||||||||||||||||
Total ALLL / NPLs | 217 | % | 244 | % | 249 | % | |||||||||||||||||
77 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31 | |||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||
Nonperforming loans and leases (a) (b) | |||||||||||||||||||||||
Regional Banking | $ | 227 | $ | 163 | $ | 216 | |||||||||||||||||
Specialty Banking | 60 | 78 | 117 | ||||||||||||||||||||
Corporate | 29 | 34 | 53 | ||||||||||||||||||||
Consolidated | $ | 316 | $ | 275 | $ | 386 | |||||||||||||||||
Foreclosed real estate (c) | |||||||||||||||||||||||
Regional Banking | $ | — | $ | 2 | $ | 12 | |||||||||||||||||
Specialty Banking | 2 | — | 1 | ||||||||||||||||||||
Corporate | 1 | 1 | 2 | ||||||||||||||||||||
Consolidated | $ | 3 | $ | 3 | $ | 15 | |||||||||||||||||
Nonperforming Assets (a) (b) (c) | |||||||||||||||||||||||
Regional Banking | $ | 227 | $ | 165 | $ | 228 | |||||||||||||||||
Specialty Banking | 62 | 78 | 118 | ||||||||||||||||||||
Corporate | 30 | 35 | 55 | ||||||||||||||||||||
Consolidated | $ | 319 | $ | 278 | $ | 401 | |||||||||||||||||
Nonperforming loans and leases to total loans and leases | |||||||||||||||||||||||
Regional Banking | 0.54 | % | 0.43 | % | 0.54 | % | |||||||||||||||||
Specialty Banking | 0.37 | 0.48 | 0.68 | ||||||||||||||||||||
Corporate | 6.28 | 5.39 | 5.70 | ||||||||||||||||||||
Consolidated | 0.54 | % | 0.50 | % | 0.66 | % | |||||||||||||||||
NPA % (d) | |||||||||||||||||||||||
Regional Banking | 0.55 | % | 0.44 | % | 0.57 | % | |||||||||||||||||
Specialty Banking | 0.39 | 0.48 | 0.68 | ||||||||||||||||||||
Corporate | 6.54 | 5.51 | 5.87 | ||||||||||||||||||||
Consolidated | 0.55 | % | 0.51 | % | 0.69 | % | |||||||||||||||||
78 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31 | |||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||||||||
Accruing loans and leases 30+ days past due | |||||||||||||||||||||||
C&I | $ | 61 | $ | 58 | $ | 15 | |||||||||||||||||
CRE | 11 | 13 | 23 | ||||||||||||||||||||
Consumer real estate | 55 | 70 | 69 | ||||||||||||||||||||
Credit card and other | 11 | 7 | 10 | ||||||||||||||||||||
Total accruing loans and leases 30+ days past due | $ | 138 | $ | 148 | $ | 117 | |||||||||||||||||
Accruing loans and leases 30+ days past due % | |||||||||||||||||||||||
C&I | 0.19 | % | 0.19 | % | 0.05 | % | |||||||||||||||||
CRE | 0.08 | 0.11 | 0.19 | ||||||||||||||||||||
Consumer real estate | 0.44 | 0.65 | 0.58 | ||||||||||||||||||||
Credit card and other | 1.28 | 0.76 | 0.87 | ||||||||||||||||||||
Total accruing loans and leases 30+ days past due % | 0.24 | % | 0.27 | % | 0.20 | % | |||||||||||||||||
Accruing loans and leases 90+ days past due (a) (b) (c) | |||||||||||||||||||||||
C&I | $ | 11 | $ | 5 | $ | — | |||||||||||||||||
CRE | — | — | — | ||||||||||||||||||||
Consumer real estate | 18 | 33 | 16 | ||||||||||||||||||||
Credit card and other | 4 | 2 | 1 | ||||||||||||||||||||
Total accruing loans and leases 90+ days past due | $ | 33 | $ | 40 | $ | 17 | |||||||||||||||||
Loans held for sale | |||||||||||||||||||||||
30 to 89 days past due (b) | $ | 10 | $ | 7 | $ | 6 | |||||||||||||||||
30 to 89 days past due - guaranteed portion (b) (d) | 7 | 2 | 5 | ||||||||||||||||||||
90+ days past due (b) | 16 | 24 | 12 | ||||||||||||||||||||
90+ days past due - guaranteed portion (b) (d) | 6 | 12 | 10 | ||||||||||||||||||||
79 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
80 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in millions) | December 31, 2022 | December 31, 2021 | ||||||||||||
Held for investment: | ||||||||||||||
Commercial loans: | ||||||||||||||
Current | $ | 5 | $ | 53 | ||||||||||
Delinquent | — | — | ||||||||||||
Non-accrual | 47 | 35 | ||||||||||||
Total commercial loans | 52 | 88 | ||||||||||||
Consumer real estate: | ||||||||||||||
Current | $ | 66 | $ | 60 | ||||||||||
Delinquent | 4 | 4 | ||||||||||||
Non-accrual (a) | 58 | 53 | ||||||||||||
Total consumer real estate | 128 | 117 | ||||||||||||
Credit card and other: | ||||||||||||||
Current | — | 1 | ||||||||||||
Delinquent | — | — | ||||||||||||
Non-accrual | — | — | ||||||||||||
Total credit card and other | — | 1 | ||||||||||||
Total held for investment | $ | 180 | $ | 206 | ||||||||||
Held for sale: | ||||||||||||||
Current | $ | 23 | $ | 27 | ||||||||||
Delinquent | 6 | 7 | ||||||||||||
Non-accrual | 1 | 1 | ||||||||||||
Total held for sale | 30 | 35 | ||||||||||||
Total troubled debt restructurings | $ | 210 | $ | 241 | ||||||||||
81 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in millions) | 2022 | Percent of Total | 2022 Growth Rate | 2021 | Percent of Total | 2021 Growth Rate | 2020 | Percent of Total | 2020 Growth Rate | |||||||||||||||||||||||||||||||||||||||||||||||
Savings | $ | 21,971 | 35 | % | (17) | % | $ | 26,457 | 35 | % | (3) | % | $ | 27,324 | 39 | % | 134 | % | ||||||||||||||||||||||||||||||||||||||
Time deposits | 2,887 | 4 | (18) | 3,500 | 5 | (31) | 5,070 | 7 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||
Other interest-bearing deposits | 15,165 | 24 | (11) | 17,055 | 23 | 11 | 15,415 | 22 | 77 | |||||||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 40,023 | 63 | (15) | 47,012 | 63 | (2) | 47,809 | 68 | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 23,466 | 37 | (16) | 27,883 | 37 | 26 | 22,173 | 32 | 163 | |||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 63,489 | 100 | % | (15) | % | $ | 74,895 | 100 | % | 7 | % | $ | 69,982 | 100 | % | 116 | % | ||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Uninsured deposits | $ | 30,304 | $ | 39,756 | $ | 33,057 | ||||||||||||||
(Dollars in millions) | December 31, 2022 | |||||||
Portion of U.S. time deposits in excess of insurance limit | $ | 643 | ||||||
Time deposits otherwise uninsured with a maturity of: | ||||||||
3 months or less | 198 | |||||||
Over 3 months through 6 months | 147 | |||||||
Over 6 months through 12 months | 225 | |||||||
Over 12 months | 73 |
82 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in millions) | December 31, 2022 | December 31, 2021 | ||||||||||||
FHN shareholders’ equity | $ | 8,252 | $ | 8,199 | ||||||||||
Modified CECL transitional amount (a) | 85 | 114 | ||||||||||||
FHN non-cumulative perpetual preferred | (1,014) | (520) | ||||||||||||
Common equity tier 1 before regulatory adjustments | $ | 7,323 | $ | 7,793 | ||||||||||
Regulatory adjustments: | ||||||||||||||
Disallowed goodwill and other intangibles | (1,658) | (1,711) | ||||||||||||
Net unrealized (gains) losses on securities available for sale | 972 | 36 | ||||||||||||
Net unrealized (gains) losses on pension and other postretirement plans | 269 | 255 | ||||||||||||
Net unrealized (gains) losses on cash flow hedges | 126 | (3) | ||||||||||||
Disallowed deferred tax assets | — | (2) | ||||||||||||
Other deductions from common equity tier 1 | — | (1) | ||||||||||||
Common equity tier 1 | $ | 7,032 | $ | 6,367 | ||||||||||
FHN non-cumulative perpetual preferred (b) | 920 | 426 | ||||||||||||
Qualifying noncontrolling interest—First Horizon Bank preferred stock | 295 | 295 | ||||||||||||
Tier 1 capital | $ | 8,247 | $ | 7,088 | ||||||||||
Tier 2 capital | 975 | 830 | ||||||||||||
Total regulatory capital | $ | 9,222 | $ | 7,918 | ||||||||||
Risk-Weighted Assets | ||||||||||||||
First Horizon Corporation | $ | 69,163 | $ | 64,183 | ||||||||||
First Horizon Bank | 68,728 | 63,601 | ||||||||||||
Average Assets for Leverage | ||||||||||||||
First Horizon Corporation | 79,583 | 87,683 | ||||||||||||
First Horizon Bank | 78,923 | 86,953 |
83 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
(Dollars in millions) | Ratio | Amount | Ratio | Amount | ||||||||||||||||||||||
Common Equity Tier 1 | ||||||||||||||||||||||||||
First Horizon Corporation | 10.17 | % | $ | 7,032 | 9.92 | % | $ | 6,367 | ||||||||||||||||||
First Horizon Bank | 10.77 | 7,405 | 10.75 | % | 6,838 | |||||||||||||||||||||
Tier 1 | ||||||||||||||||||||||||||
First Horizon Corporation | 11.92 | 8,247 | 11.04 | 7,088 | ||||||||||||||||||||||
First Horizon Bank | 11.20 | 7,700 | 11.22 | 7,133 | ||||||||||||||||||||||
Total | ||||||||||||||||||||||||||
First Horizon Corporation | 13.33 | 9,222 | 12.34 | 7,918 | ||||||||||||||||||||||
First Horizon Bank | 12.41 | 8,532 | 12.41 | 7,893 | ||||||||||||||||||||||
Tier 1 Leverage | ||||||||||||||||||||||||||
First Horizon Corporation | 10.36 | 8,247 | 8.08 | 7,088 | ||||||||||||||||||||||
First Horizon Bank | 9.76 | 7,700 | 8.20 | 7,133 | ||||||||||||||||||||||
Other Capital Ratios | ||||||||||||||||||||||||||
Total period-end equity to period-end assets | 10.83 | 9.53 | ||||||||||||||||||||||||
Tangible common equity to tangible assets (c) | 7.12 | 6.73 | ||||||||||||||||||||||||
Adjusted tangible common equity to risk weighted assets (c) | 9.35 | 9.20 |
84 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollar values and volume in thousands, except per share data) | Total number of shares purchased | Average price paid per share (a) | Total number of shares purchased as part of publicly announced programs | Maximum approximate dollar value that may yet be purchased under the programs | ||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||
October 1 to October 31 | — | N/A | — | $ | 598,646 | |||||||||||||||||||||
November 1 to November 30 | — | N/A | — | $ | 598,646 | |||||||||||||||||||||
December 1 to December 31 | — | N/A | — | $ | 598,646 | |||||||||||||||||||||
Total | — | N/A | — | |||||||||||||||||||||||
85 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Volume in thousands, except per share data) | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced programs | Maximum number of shares that may yet be purchased under the programs | ||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||
October 1 to October 31 | 8 | $ | 22.91 | 8 | 22,518 | |||||||||||||||||||||
November 1 to November 30 | 1 | 24.34 | 1 | 22,517 | ||||||||||||||||||||||
December 1 to December 31 | 11 | 24.83 | 11 | 22,506 | ||||||||||||||||||||||
Total | 20 | $ | 24.06 | 20 | ||||||||||||||||||||||
86 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
87 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
Year Ended December 31, 2022 | As of December 31, 2022 | |||||||||||||||||||||||||
(Dollars in millions) | Mean | High | Low | |||||||||||||||||||||||
1-day | ||||||||||||||||||||||||||
VaR | $ | 2 | $ | 4 | $ | 2 | $ | 3 | ||||||||||||||||||
SVaR | 5 | 7 | 4 | 6 | ||||||||||||||||||||||
10-day | ||||||||||||||||||||||||||
VaR | 8 | 11 | 3 | 10 | ||||||||||||||||||||||
SVaR | 24 | 34 | 18 | 29 | ||||||||||||||||||||||
Year Ended December 31, 2021 | As of December 31, 2021 | |||||||||||||||||||||||||
(Dollars in millions) | Mean | High | Low | |||||||||||||||||||||||
1-day | ||||||||||||||||||||||||||
VaR | $ | 1 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||||||||
SVaR | 4 | 7 | 2 | 5 | ||||||||||||||||||||||
10-day | ||||||||||||||||||||||||||
VaR | 5 | 21 | 1 | 5 | ||||||||||||||||||||||
SVaR | 18 | 27 | 11 | 22 |
As of December 31, 2022 | As of December 31, 2021 | |||||||||||||||||||||||||
(Dollars in millions) | 1-day | 10-day | 1-day | 10-day | ||||||||||||||||||||||
Interest rate risk | $ | 1 | $ | 3 | $ | 1 | $ | 1 | ||||||||||||||||||
Credit spread risk | 1 | 2 | 1 | 1 |
88 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
Shifts in Interest Rates (in bps) | % Change in Projected Net Interest Income | |||||||
-100 | (7.4)% | |||||||
-50 | (3.6)% | |||||||
-25 | (1.8)% | |||||||
+25 | 1.8% | |||||||
+50 | 3.6% | |||||||
+100 | 7.0% | |||||||
+200 | 11.5% |
89 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
Dividend/Share | Record Date | Payment Date | ||||||||||||||||||
Common Stock | $ | 0.15 | 3/17/2023 | 4/3/2023 | ||||||||||||||||
Preferred Stock | ||||||||||||||||||||
Series C | $ | 165.00 | 4/14/2023 | 5/1/2023 | ||||||||||||||||
Series D | $ | 305.00 | 4/14/2023 | 5/1/2023 | ||||||||||||||||
Series E | $ | 1,625.00 | 3/24/2023 | 4/10/2023 | ||||||||||||||||
Series F | $ | 1,175.00 | 3/24/2023 | 4/10/2023 |
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
Payments due by period (a) | ||||||||||||||||||||||||||||||||
Less than | 1 year - | 3 years - | After 5 | |||||||||||||||||||||||||||||
(Dollars in millions) | 1 year | < 3 years | < 5 years | years | Total | |||||||||||||||||||||||||||
Contractual obligations: | ||||||||||||||||||||||||||||||||
Time deposit maturities (b) (c) | $ | 2,415 | $ | 341 | $ | 116 | $ | 15 | $ | 2,887 | ||||||||||||||||||||||
Short-term borrowings (b) (d) | 2,841 | — | — | — | 2,841 | |||||||||||||||||||||||||||
Term borrowings (b) (e) | 450 | 356 | — | 812 | 1,618 | |||||||||||||||||||||||||||
Annual rental commitments under noncancelable leases (b) (f) | 46 | 86 | 79 | 228 | 439 | |||||||||||||||||||||||||||
Purchase obligations | 189 | 118 | 27 | 7 | 341 | |||||||||||||||||||||||||||
Total contractual obligations | $ | 5,941 | $ | 901 | $ | 222 | $ | 1,062 | $ | 8,126 | ||||||||||||||||||||||
Moody's (a) | Fitch (b) | ||||||||||||||||
First Horizon Corporation | |||||||||||||||||
Overall credit rating: Long-term/Short-term/Outlook | Baa3/--/RUR | BBB/F2/RWP | |||||||||||||||
Long-term senior debt | Baa3 | BBB | |||||||||||||||
Subordinated debt (c) | Baa3 | BBB- | |||||||||||||||
Junior subordinated debt (c) | Ba1 | BB- | |||||||||||||||
Preferred stock | Ba2 | BB- | |||||||||||||||
First Horizon Bank | |||||||||||||||||
Overall credit rating: Long-term/Short-term/Outlook | Baa3/P-2/RUR | BBB/F2/RWP | |||||||||||||||
Long-term/short-term deposits | A3/P-2 | BBB+/F2 | |||||||||||||||
Long-term/short-term senior debt (c) | Baa3/P-2 | BBB/F2 | |||||||||||||||
Subordinated debt | Baa3 | BBB- | |||||||||||||||
Preferred stock | Ba2 | BB- | |||||||||||||||
FT Real Estate Securities Company, Inc. | |||||||||||||||||
Preferred stock | Ba1 |
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in billions) | As of December 31, 2022 | Mature after June 2023 | ||||||
Commercial loans (a) | $ | 9 | $ | 9 | ||||
Consumer loans (a) | 3 | 3 | ||||||
Customer swaps (b) | 5 | 5 | ||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
(Dollars in millions; shares in thousands) | 2022 | 2021 | 2020 | |||||||||||||||||
Pre-provision Net Revenue (Non-GAAP) | ||||||||||||||||||||
Net interest income (GAAP) | $ | 2,392 | $ | 1,994 | $ | 1,662 | ||||||||||||||
Plus: Noninterest income (GAAP) | 815 | 1,076 | 1,492 | |||||||||||||||||
Total Revenues (GAAP) | 3,207 | 3,070 | 3,154 | |||||||||||||||||
Less: Noninterest expense (GAAP) | 1,953 | 2,096 | 1,718 | |||||||||||||||||
Pre-provision Net Revenue (Non-GAAP) | $ | 1,254 | $ | 974 | $ | 1,436 | ||||||||||||||
Tangible Common Equity (Non-GAAP) | ||||||||||||||||||||
(A) Total equity (GAAP) | $ | 8,547 | $ | 8,494 | $ | 8,307 | ||||||||||||||
Less: Noncontrolling interest (a) | 295 | 295 | 295 | |||||||||||||||||
Less: Preferred stock (a) | 1,014 | 520 | 470 | |||||||||||||||||
(B) Total common equity | 7,238 | 7,679 | 7,542 | |||||||||||||||||
Less: Goodwill and other intangible assets (GAAP) (b) | 1,745 | 1,809 | 1,865 | |||||||||||||||||
(C) Tangible common equity (Non-GAAP) | 5,493 | 5,870 | 5,677 | |||||||||||||||||
Less: Unrealized gains (losses) on AFS securities, net of tax | (972) | (36) | 108 | |||||||||||||||||
(D) Adjusted tangible common equity (Non-GAAP) | $ | 6,465 | $ | 5,906 | $ | 5,569 | ||||||||||||||
Tangible Assets (Non-GAAP) | ||||||||||||||||||||
(E) Total assets (GAAP) | $ | 78,953 | $ | 89,092 | $ | 84,209 | ||||||||||||||
Less: Goodwill and other intangible assets (GAAP) (b) | 1,745 | 1,809 | 1,865 | |||||||||||||||||
(F) Tangible assets (Non-GAAP) | $ | 77,208 | $ | 87,283 | $ | 82,344 | ||||||||||||||
Average Tangible Common Equity (Non-GAAP) | ||||||||||||||||||||
Average total equity (GAAP) | $ | 8,579 | $ | 8,479 | $ | 6,609 | ||||||||||||||
Less: Average noncontrolling interest (a) | 295 | 295 | 295 | |||||||||||||||||
Less: Average preferred stock (a) | 935 | 506 | 297 | |||||||||||||||||
(G) Total average common equity | 7,349 | 7,678 | 6,017 | |||||||||||||||||
Less: Average goodwill and other intangible assets (GAAP) (b) | 1,777 | 1,836 | 1,696 | |||||||||||||||||
(H) Average tangible common equity (Non-GAAP) | $ | 5,572 | $ | 5,842 | $ | 4,321 | ||||||||||||||
Net Income Available to Common Shareholders | ||||||||||||||||||||
(I) Net income available to common shareholders | $ | 868 | $ | 962 | $ | 822 | ||||||||||||||
Risk Weighted Assets | ||||||||||||||||||||
(J) Risk weighted assets (c) | $ | 69,163 | $ | 64,183 | $ | 63,140 | ||||||||||||||
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ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) | ||||||||
Period-end shares outstanding | ||||||||||||||||||||
(K) Period-end shares outstanding | 537,101 | 533,577 | 555,031 | |||||||||||||||||
Ratios | ||||||||||||||||||||
(A)/(E) Total period-end equity to period-end assets (GAAP) | 10.83 | % | 9.53 | % | 9.86 | % | ||||||||||||||
(C)/(F) Tangible common equity to tangible assets (Non-GAAP) | 7.12 | 6.73 | 6.89 | |||||||||||||||||
(D)/(J) Adjusted tangible common equity to risk weighted assets (Non-GAAP) | 9.35 | 9.20 | 8.82 | |||||||||||||||||
(I)/(G) Return on average common equity (GAAP) | 11.81 | 12.53 | 13.66 | |||||||||||||||||
(I)/(H) Return on average tangible common equity (Non-GAAP) | 15.58 | 16.46 | 19.03 | |||||||||||||||||
(B)/(K) Book value per common share (GAAP) | $ | 13.48 | $ | 14.39 | $ | 13.59 | ||||||||||||||
(C)/(K) Tangible book value per common share (Non-GAAP) | $ | 10.23 | $ | 11.00 | $ | 10.23 | ||||||||||||||
Loans and leases excluding PPP loans (Non-GAAP) | ||||||||||||||||||||
Commercial loans and leases excluding PPP loans | $ | 44,933 | $ | 42,139 | $ | 41,327 | ||||||||||||||
PPP loans | 76 | 1,038 | 4,052 | |||||||||||||||||
Total commercial loans and leases | 45,009 | 43,177 | 45,379 | |||||||||||||||||
Total consumer loans | 13,093 | 11,682 | 12,853 | |||||||||||||||||
Total loans and leases | $ | 58,102 | $ | 54,859 | $ | 58,232 | ||||||||||||||
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ITEM 7A. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK | ||||||||
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
ITEM 8 TOPICS |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
ITEM 8 TOPICS |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
MANAGEMENT REPORT ON ICOFR |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
OPINION ON ICOFR |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
OPINION ON CONSOLIDATED FINANCIAL STATEMENTS |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
OPINION ON CONSOLIDATED FINANCIAL STATEMENTS |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
OPINION ON CONSOLIDATED FINANCIAL STATEMENTS |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED BALANCE SHEETS |
December 31, | ||||||||||||||
(Dollars in millions, except per share amounts) | 2022 | 2021 | ||||||||||||
Assets | ||||||||||||||
Cash and due from banks | $ | 1,061 | $ | 1,147 | ||||||||||
Interest-bearing deposits with banks | 1,384 | 14,907 | ||||||||||||
Federal funds sold and securities purchased under agreements to resell | 482 | 641 | ||||||||||||
Trading securities | 1,375 | 1,601 | ||||||||||||
Securities available for sale at fair value | 8,836 | 8,707 | ||||||||||||
Securities held to maturity (fair value of $1,209 and $705, respectively) | 1,371 | 712 | ||||||||||||
Loans held for sale (including $51 and $258 at fair value, respectively) | 590 | 1,172 | ||||||||||||
Loans and leases | 58,102 | 54,859 | ||||||||||||
Allowance for loan and lease losses | (685) | (670) | ||||||||||||
Net loans and leases | 57,417 | 54,189 | ||||||||||||
Premises and equipment | 612 | 665 | ||||||||||||
Goodwill | 1,511 | 1,511 | ||||||||||||
Other intangible assets | 234 | 298 | ||||||||||||
Other assets | 4,080 | 3,542 | ||||||||||||
Total assets | $ | 78,953 | $ | 89,092 | ||||||||||
Liabilities | ||||||||||||||
Noninterest-bearing deposits | $ | 23,466 | $ | 27,883 | ||||||||||
Interest-bearing deposits | 40,023 | 47,012 | ||||||||||||
Total deposits | 63,489 | 74,895 | ||||||||||||
Trading liabilities | 335 | 426 | ||||||||||||
Short-term borrowings | 2,506 | 2,124 | ||||||||||||
Term borrowings | 1,597 | 1,590 | ||||||||||||
Other liabilities | 2,479 | 1,563 | ||||||||||||
Total liabilities | 70,406 | 80,598 | ||||||||||||
Equity | ||||||||||||||
Preferred stock, Non-cumulative perpetual, no par value; authorized 5,000,000 shares; issued 31,686 and 26,750 shares, respectively | 1,014 | 520 | ||||||||||||
Common stock, $0.625 par value; authorized 700,000,000 shares; issued 537,100,615 and 533,576,766 shares, respectively | 336 | 333 | ||||||||||||
Capital surplus | 4,840 | 4,743 | ||||||||||||
Retained earnings | 3,430 | 2,891 | ||||||||||||
Accumulated other comprehensive loss, net | (1,368) | (288) | ||||||||||||
FHN shareholders' equity | 8,252 | 8,199 | ||||||||||||
Noncontrolling interest | 295 | 295 | ||||||||||||
Total equity | 8,547 | 8,494 | ||||||||||||
Total liabilities and equity | $ | 78,953 | $ | 89,092 | ||||||||||
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED STATEMENTS OF INCOME |
Year Ended December 31 | ||||||||||||||||||||
(Dollars in millions, except per share data; shares in thousands) | 2022 | 2021 | 2020 | |||||||||||||||||
Interest income | ||||||||||||||||||||
Interest and fees on loans and leases | $ | 2,292 | $ | 1,957 | $ | 1,722 | ||||||||||||||
Interest and fees on loans held for sale | 39 | 33 | 30 | |||||||||||||||||
Interest on investment securities | 198 | 121 | 105 | |||||||||||||||||
Interest on trading securities | 58 | 30 | 35 | |||||||||||||||||
Interest on other earning assets | 96 | 17 | 6 | |||||||||||||||||
Total interest income | 2,683 | 2,158 | 1,898 | |||||||||||||||||
Interest expense | ||||||||||||||||||||
Interest on deposits | 184 | 81 | 152 | |||||||||||||||||
Interest on trading liabilities | 12 | 6 | 6 | |||||||||||||||||
Interest on short-term borrowings | 23 | 5 | 14 | |||||||||||||||||
Interest on term borrowings | 72 | 72 | 64 | |||||||||||||||||
Total interest expense | 291 | 164 | 236 | |||||||||||||||||
Net interest income | 2,392 | 1,994 | 1,662 | |||||||||||||||||
Provision for credit losses | 95 | (310) | 503 | |||||||||||||||||
Net interest income after provision for credit losses | 2,297 | 2,304 | 1,159 | |||||||||||||||||
Noninterest income | ||||||||||||||||||||
Fixed income | 205 | 406 | 423 | |||||||||||||||||
Deposit transactions and cash management | 171 | 175 | 148 | |||||||||||||||||
Brokerage, management fees and commissions | 92 | 88 | 66 | |||||||||||||||||
Card and digital banking fees | 84 | 78 | 60 | |||||||||||||||||
Mortgage banking and title income | 68 | 154 | 129 | |||||||||||||||||
Other service charges and fees | 54 | 44 | 26 | |||||||||||||||||
Trust services and investment management | 48 | 51 | 39 | |||||||||||||||||
Securities gains (losses), net | 18 | 13 | (6) | |||||||||||||||||
Purchase accounting gain | — | (1) | 533 | |||||||||||||||||
Other income | 75 | 68 | 74 | |||||||||||||||||
Total noninterest income | 815 | 1,076 | 1,492 | |||||||||||||||||
Noninterest expense | ||||||||||||||||||||
Personnel expense | 1,101 | 1,210 | 1,033 | |||||||||||||||||
Net occupancy expense | 128 | 137 | 116 | |||||||||||||||||
Computer software | 113 | 116 | 85 | |||||||||||||||||
Operations services | 87 | 80 | 56 | |||||||||||||||||
Legal and professional fees | 62 | 68 | 84 | |||||||||||||||||
Contract employment and outsourcing | 54 | 67 | 24 | |||||||||||||||||
Amortization of intangible assets | 51 | 56 | 40 | |||||||||||||||||
Advertising and public relations | 50 | 37 | 18 | |||||||||||||||||
Equipment expense | 45 | 47 | 42 | |||||||||||||||||
Communications and delivery | 37 | 37 | 31 | |||||||||||||||||
Contributions | 7 | 14 | 41 | |||||||||||||||||
Impairment of long-lived assets | — | 34 | 7 | |||||||||||||||||
Other expense | 218 | 193 | 141 | |||||||||||||||||
Total noninterest expense | 1,953 | 2,096 | 1,718 | |||||||||||||||||
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED STATEMENTS OF INCOME |
Income before income taxes | 1,159 | 1,284 | 933 | |||||||||||||||||
Income tax expense | 247 | 274 | 76 | |||||||||||||||||
Net income | $ | 912 | $ | 1,010 | $ | 857 | ||||||||||||||
Net income attributable to noncontrolling interest | 12 | 11 | 12 | |||||||||||||||||
Net income attributable to controlling interest | $ | 900 | $ | 999 | $ | 845 | ||||||||||||||
Preferred stock dividends | 32 | 37 | 23 | |||||||||||||||||
Net income available to common shareholders | $ | 868 | $ | 962 | $ | 822 | ||||||||||||||
Basic earnings per share | $ | 1.62 | $ | 1.76 | $ | 1.90 | ||||||||||||||
Diluted earnings per share | $ | 1.53 | $ | 1.74 | $ | 1.89 | ||||||||||||||
Weighted average common shares | 535,033 | 546,354 | 432,125 | |||||||||||||||||
Diluted average common shares | 566,004 | 551,241 | 433,717 | |||||||||||||||||
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
Year Ended December 31 | ||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Net income | $ | 912 | $ | 1,010 | $ | 857 | ||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Net unrealized gains (losses) on securities available for sale | (937) | (144) | 77 | |||||||||||||||||
Net unrealized gains (losses) on cash flow hedges | (129) | (10) | 9 | |||||||||||||||||
Net unrealized gains (losses) on pension and other postretirement plans | (14) | 6 | 13 | |||||||||||||||||
Other comprehensive income (loss) | (1,080) | (148) | 99 | |||||||||||||||||
Comprehensive income (loss) | (168) | 862 | 956 | |||||||||||||||||
Comprehensive income attributable to noncontrolling interest | 12 | 11 | 12 | |||||||||||||||||
Comprehensive income (loss) attributable to controlling interest | $ | (180) | $ | 851 | $ | 944 | ||||||||||||||
Income tax expense (benefit) of items included in other comprehensive income: | ||||||||||||||||||||
Net unrealized gains (losses) on securities available for sale | $ | (302) | $ | (46) | $ | 25 | ||||||||||||||
Net unrealized gains (losses) on cash flow hedges | (42) | (3) | 3 | |||||||||||||||||
Net unrealized gains (losses) on pension and other postretirement plans | (5) | 2 | 3 | |||||||||||||||||
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
Preferred Stock | Common Sock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data; shares in thousands) | Shares | Amount | Shares | Amount | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) (a) | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | 1,000 | $ | 96 | 311,469 | $ | 195 | $ | 2,931 | $ | 1,798 | $ | (239) | $ | 295 | $ | 5,076 | ||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | (96) | — | — | (96) | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance, as adjusted | 1,000 | 96 | 311,469 | 195 | 2,931 | 1,702 | (239) | 295 | 4,980 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 845 | — | 12 | 857 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | 99 | — | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | — | — | — | 845 | 99 | 12 | 956 | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (23) | — | — | (23) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($0.60 per share) | — | — | — | — | — | (263) | — | — | (263) | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock issuance (1,500 shares issued at $100,000 per share net of offering costs) | 1,500 | 144 | — | — | — | — | — | — | 144 | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased (b) | — | — | (426) | — | (4) | — | — | — | (4) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised and restricted stock awards | — | — | 1,726 | — | 7 | — | — | — | 7 | |||||||||||||||||||||||||||||||||||||||||||||||
Issued in business combination | 23,750 | 230 | 243,015 | 152 | 2,115 | — | — | — | 2,497 | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 32 | — | — | — | 32 | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared - noncontrolling interest of subsidiary preferred stock | — | — | — | — | — | — | — | (12) | (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Other (c) | — | — | (753) | — | (7) | — | — | — | (7) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | 26,250 | 470 | 555,031 | 347 | 5,074 | 2,261 | (140) | 295 | 8,307 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 999 | — | 11 | 1,010 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | (148) | — | (148) | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | — | — | — | 999 | (148) | 11 | 862 | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (32) | — | — | (32) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($0.60 per share) | — | — | — | — | — | (332) | — | — | (332) | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock issuance (1,500 shares issued at $100,000 per share net of offering costs) | 1,500 | 145 | — | — | — | — | — | — | 145 | |||||||||||||||||||||||||||||||||||||||||||||||
Call of preferred stock | (1,000) | (95) | — | — | — | (5) | — | — | (100) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased (b) | — | — | (25,063) | (16) | (400) | — | — | — | (416) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised and restricted stock awards | — | — | 3,609 | 2 | 26 | — | — | — | 28 | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 43 | — | — | — | 43 | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared - noncontrolling interest of subsidiary preferred stock | — | — | — | — | — | — | — | (11) | (11) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | 26,750 | 520 | 533,577 | 333 | 4,743 | 2,891 | (288) | 295 | 8,494 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 900 | — | 12 | 912 | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | (1,080) | — | (1,080) | |||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | — | — | — | 900 | (1,080) | 12 | (168) | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | (32) | — | — | (32) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($0.60 per share) | — | — | — | — | — | (329) | — | — | (329) | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock issuance (4,936 shares issued at $100,000 per share) | 4,936 | 494 | — | — | — | — | — | — | 494 | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased (b) | — | — | (577) | — | (12) | — | — | — | (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised and restricted stock awards | — | — | 4,101 | 3 | 34 | — | — | — | 37 | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 75 | — | — | — | 75 | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared - noncontrolling interest of subsidiary preferred stock | — | — | — | — | — | — | — | (12) | (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | 31,686 | $ | 1,014 | 537,101 | $ | 336 | $ | 4,840 | $ | 3,430 | $ | (1,368) | $ | 295 | $ | 8,547 |
116 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
Year Ended December 31 | ||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income | $ | 912 | $ | 1,010 | $ | 857 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Provision for credit losses | 95 | (310) | 503 | |||||||||||||||||
Deferred income tax expense (benefit) | 91 | — | (18) | |||||||||||||||||
Depreciation and amortization of premises and equipment | 59 | 61 | 52 | |||||||||||||||||
Amortization of intangible assets | 51 | 56 | 40 | |||||||||||||||||
Net other amortization and accretion | (11) | (67) | (30) | |||||||||||||||||
Net decrease in trading securities | 2,120 | 1,824 | 1,912 | |||||||||||||||||
Net (increase) decrease in derivatives | 524 | 412 | (223) | |||||||||||||||||
Purchase accounting gain | — | 1 | (533) | |||||||||||||||||
Stock-based compensation expense | 75 | 43 | 32 | |||||||||||||||||
Securities (gains) losses, net | (18) | (13) | 6 | |||||||||||||||||
Loss on debt extinguishment | — | 26 | — | |||||||||||||||||
Net (gains) losses on sale/disposal of fixed assets | (1) | 29 | 8 | |||||||||||||||||
(Gain) loss on BOLI | (9) | (8) | (5) | |||||||||||||||||
Gain on sale of mortgage servicing rights | (12) | — | — | |||||||||||||||||
Gain on sale of title services business | (22) | — | — | |||||||||||||||||
Loans held for sale: | ||||||||||||||||||||
Purchases and originations | (3,728) | (6,644) | (4,710) | |||||||||||||||||
Gross proceeds from settlements and sales | 2,310 | 4,451 | 2,907 | |||||||||||||||||
(Gain) loss due to fair value adjustments and other | 107 | (205) | (81) | |||||||||||||||||
Other operating activities, net | (232) | 75 | (545) | |||||||||||||||||
Total adjustments | 1,399 | (269) | (685) | |||||||||||||||||
Net cash provided by operating activities | 2,311 | 741 | 172 | |||||||||||||||||
Investing Activities | ||||||||||||||||||||
Proceeds from sales of securities available for sale | — | 68 | 629 | |||||||||||||||||
Proceeds from maturities of securities available for sale | 1,351 | 2,771 | 4,099 | |||||||||||||||||
Purchases of securities available for sale | (2,767) | (3,736) | (4,740) | |||||||||||||||||
Purchases of securities held to maturity | (712) | (720) | — | |||||||||||||||||
Proceeds from prepayments of securities held to maturity | 55 | 17 | — | |||||||||||||||||
Proceeds from sales of premises and equipment | 18 | 42 | 12 | |||||||||||||||||
Purchases of premises and equipment | (28) | (53) | (58) | |||||||||||||||||
Proceeds from BOLI | 22 | 22 | 12 | |||||||||||||||||
Net (increase) decrease in loans and leases | (3,224) | 3,509 | (819) | |||||||||||||||||
Net (increase) decrease in interest-bearing deposits with banks | 13,523 | (6,556) | (6,187) | |||||||||||||||||
Cash received for acquisitions, net | — | — | 2,071 | |||||||||||||||||
Other investing activities, net | 75 | 19 | 14 | |||||||||||||||||
Net cash provided by (used in) investing activities | 8,313 | (4,617) | (4,967) | |||||||||||||||||
Financing Activities | ||||||||||||||||||||
Common stock: | ||||||||||||||||||||
Stock options exercised | 36 | 28 | 7 | |||||||||||||||||
Cash dividends paid | (324) | (333) | (222) | |||||||||||||||||
Repurchase of shares | (12) | (416) | (4) | |||||||||||||||||
Cancellation of common shares | — | — | (7) | |||||||||||||||||
Preferred stock issuance | 494 | 145 | 144 | |||||||||||||||||
Call of preferred stock | — | (100) | — |
117 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
Cash dividends paid - preferred stock - noncontrolling interest | (11) | (11) | (12) | |||||||||||||||||
Cash dividends paid - preferred stock | (32) | (33) | (17) | |||||||||||||||||
Net increase (decrease) in deposits | (11,406) | 4,919 | 7,143 | |||||||||||||||||
Net increase (decrease) in short-term borrowings | 382 | (75) | (1,529) | |||||||||||||||||
Increases (decreases) in term borrowings | 4 | (108) | (327) | |||||||||||||||||
Net cash provided by (used in) financing activities | (10,869) | 4,016 | 5,176 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (245) | 140 | 381 | |||||||||||||||||
Cash and cash equivalents at beginning of period | 1,788 | 1,648 | 1,267 | |||||||||||||||||
Cash and cash equivalents at end of period | $ | 1,543 | $ | 1,788 | $ | 1,648 | ||||||||||||||
Supplemental Disclosures | ||||||||||||||||||||
Total interest paid | $ | 280 | $ | 170 | $ | 261 | ||||||||||||||
Total taxes paid | 20 | 258 | 105 | |||||||||||||||||
Total taxes refunded | 7 | 30 | 36 | |||||||||||||||||
Transfer from loans to OREO | 3 | 4 | 2 | |||||||||||||||||
Transfer from loans HFS to trading securities | 1,893 | 2,232 | 1,742 | |||||||||||||||||
Transfer from loans to loans HFS | — | 31 | 9 |
118 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
119 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
120 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
122 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
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ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
124 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
125 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
126 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
127 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
128 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
129 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 1—SIGNIFICANT ACCOUNTING POLICIES |
130 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 2—INVESTMENT SECURITIES |
December 31, 2022 | ||||||||||||||||||||||||||
(Dollars in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||
Government agency issued MBS | $ | 5,457 | $ | 1 | $ | (695) | $ | 4,763 | ||||||||||||||||||
Government agency issued CMO | 2,682 | — | (369) | 2,313 | ||||||||||||||||||||||
Other U.S. government agencies | 1,325 | — | (162) | 1,163 | ||||||||||||||||||||||
States and municipalities | 658 | 1 | (62) | 597 | ||||||||||||||||||||||
Total securities available for sale (a) | $ | 10,122 | $ | 2 | $ | (1,288) | $ | 8,836 | ||||||||||||||||||
Securities held to maturity: | ||||||||||||||||||||||||||
Government agency issued MBS | $ | 897 | $ | — | $ | (109) | $ | 788 | ||||||||||||||||||
Government agency issued CMO | 474 | — | (53) | 421 | ||||||||||||||||||||||
Total securities held to maturity | $ | 1,371 | $ | — | $ | (162) | $ | 1,209 | ||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||
(Dollars in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||
Government agency issued MBS | $ | 5,062 | $ | 42 | $ | (49) | $ | 5,055 | ||||||||||||||||||
Government agency issued CMO | 2,296 | 8 | (47) | 2,257 | ||||||||||||||||||||||
Other U.S. government agencies | 861 | 4 | (15) | 850 | ||||||||||||||||||||||
States and municipalities | 535 | 11 | (1) | 545 | ||||||||||||||||||||||
Total securities available for sale (a) | $ | 8,754 | $ | 65 | $ | (112) | $ | 8,707 | ||||||||||||||||||
Securities held to maturity: | ||||||||||||||||||||||||||
Government agency issued MBS | $ | 509 | $ | — | $ | (5) | $ | 504 | ||||||||||||||||||
Government agency issued CMO | 203 | — | (2) | 201 | ||||||||||||||||||||||
Total securities held to maturity | $ | 712 | $ | — | $ | (7) | $ | 705 | ||||||||||||||||||
131 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 2—INVESTMENT SECURITIES |
Held to Maturity | Available for Sale | |||||||||||||||||||||||||
(Dollars in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||
Within 1 year | $ | — | $ | — | $ | 43 | $ | 43 | ||||||||||||||||||
After 1 year through 5 years | — | — | 120 | 115 | ||||||||||||||||||||||
After 5 years through 10 years | — | — | 394 | 354 | ||||||||||||||||||||||
After 10 years | — | — | 1,426 | 1,248 | ||||||||||||||||||||||
Subtotal | — | — | 1,983 | 1,760 | ||||||||||||||||||||||
Government agency issued MBS and CMO (a) | 1,371 | 1,209 | 8,139 | 7,076 | ||||||||||||||||||||||
Total | $ | 1,371 | $ | 1,209 | $ | 10,122 | $ | 8,836 | ||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
Government agency issued MBS | $ | 2,314 | $ | (249) | $ | 2,350 | $ | (446) | $ | 4,664 | $ | (695) | ||||||||||||||||||||||||||
Government agency issued CMO | 1,104 | (123) | 1,209 | (246) | 2,313 | (369) | ||||||||||||||||||||||||||||||||
Other U.S. government agencies | 643 | (67) | 424 | (95) | 1,067 | (162) | ||||||||||||||||||||||||||||||||
States and municipalities | 493 | (48) | 54 | (14) | 547 | (62) | ||||||||||||||||||||||||||||||||
Total | $ | 4,554 | $ | (487) | $ | 4,037 | $ | (801) | $ | 8,591 | $ | (1,288) | ||||||||||||||||||||||||||
As of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
Government agency issued MBS | $ | 2,973 | $ | (41) | $ | 184 | $ | (8) | $ | 3,157 | $ | (49) | ||||||||||||||||||||||||||
Government agency issued CMO | 1,436 | (37) | 248 | (10) | 1,684 | (47) | ||||||||||||||||||||||||||||||||
Other U.S. government agencies | 459 | (11) | 90 | (4) | 549 | (15) | ||||||||||||||||||||||||||||||||
States and municipalities | 68 | (1) | — | — | 68 | (1) | ||||||||||||||||||||||||||||||||
Total | $ | 4,936 | $ | (90) | $ | 522 | $ | (22) | $ | 5,458 | $ | (112) | ||||||||||||||||||||||||||
132 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 2—INVESTMENT SECURITIES |
133 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
December 31, | ||||||||||||||
(Dollars in millions) | 2022 | 2021 | ||||||||||||
Commercial: | ||||||||||||||
Commercial and industrial (a) (b) | $ | 29,523 | $ | 26,550 | ||||||||||
Loans to mortgage companies | 2,258 | 4,518 | ||||||||||||
Total commercial, financial, and industrial | 31,781 | 31,068 | ||||||||||||
Commercial real estate | 13,228 | 12,109 | ||||||||||||
Consumer: | ||||||||||||||
HELOC | 2,028 | 1,964 | ||||||||||||
Real estate installment loans | 10,225 | 8,808 | ||||||||||||
Total consumer real estate | 12,253 | 10,772 | ||||||||||||
Credit card and other | 840 | 910 | ||||||||||||
Loans and leases | $ | 58,102 | $ | 54,859 | ||||||||||
Allowance for loan and lease losses | (685) | (670) | ||||||||||||
Net loans and leases | $ | 57,417 | $ | 54,189 | ||||||||||
134 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | LMC (a) | Revolving Loans | Revolving Loans Converted to Term Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass (PD grades 1 through 12) (b) | $ | 5,856 | $ | 4,040 | $ | 1,980 | $ | 2,099 | $ | 1,229 | $ | 3,710 | $ | 2,258 | $ | 9,165 | $ | 371 | $ | 30,708 | ||||||||||||||||||||||||||||||||||||||||||
Special Mention (PD grade 13) | 19 | 63 | 19 | 141 | 9 | 90 | — | 126 | — | 467 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard, Doubtful, or Loss (PD grades 14,15, and 16) | 41 | 54 | 51 | 38 | 67 | 124 | — | 134 | 97 | 606 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total C&I loans | $ | 5,916 | $ | 4,157 | $ | 2,050 | $ | 2,278 | $ | 1,305 | $ | 3,924 | $ | 2,258 | $ | 9,425 | $ | 468 | $ | 31,781 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | LMC (a) | Revolving Loans | Revolving Loans Converted to Term Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass (PD grades 1 through 12) (b) | $ | 7,372 | $ | 3,576 | $ | 3,439 | $ | 1,455 | $ | 1,193 | $ | 2,267 | $ | 4,518 | $ | 6,386 | $ | 13 | $ | 30,219 | ||||||||||||||||||||||||||||||||||||||||||
Special Mention (PD grade 13) | 25 | 39 | 50 | 48 | 36 | 43 | — | 100 | 4 | 345 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard, Doubtful, or Loss (PD grades 14,15, and 16) | 24 | 61 | 67 | 103 | 24 | 48 | — | 129 | 48 | 504 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total C&I loans | $ | 7,421 | $ | 3,676 | $ | 3,556 | $ | 1,606 | $ | 1,253 | $ | 2,358 | $ | 4,518 | $ | 6,615 | $ | 65 | $ | 31,068 | ||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | Revolving Loans | Revolving Loans Converted to Term Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass (PD grades 1 through 12) | $ | 2,637 | $ | 3,324 | $ | 1,488 | $ | 1,855 | $ | 808 | $ | 2,565 | $ | 274 | $ | 20 | $ | 12,971 | ||||||||||||||||||||||||||||||||||||||
Special Mention (PD grade 13) | — | 3 | 3 | 37 | 68 | 5 | 1 | — | 117 | |||||||||||||||||||||||||||||||||||||||||||||||
Substandard, Doubtful, or Loss (PD grades 14,15, and 16) | 1 | 4 | 12 | 50 | 31 | 31 | 11 | — | 140 | |||||||||||||||||||||||||||||||||||||||||||||||
Total CRE loans | $ | 2,638 | $ | 3,331 | $ | 1,503 | $ | 1,942 | $ | 907 | $ | 2,601 | $ | 286 | $ | 20 | $ | 13,228 | ||||||||||||||||||||||||||||||||||||||
135 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | Revolving Loans | Revolving Loans Converted to Term Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass (PD grades 1 through 12) | $ | 3,441 | $ | 2,065 | $ | 2,514 | $ | 929 | $ | 691 | $ | 1,822 | $ | 204 | $ | — | $ | 11,666 | ||||||||||||||||||||||||||||||||||||||
Special Mention (PD grade 13) | 4 | 26 | 52 | 125 | 20 | 65 | — | — | 292 | |||||||||||||||||||||||||||||||||||||||||||||||
Substandard, Doubtful, or Loss (PD grades 14,15, and 16) | 47 | — | 24 | 3 | 33 | 32 | 12 | — | 151 | |||||||||||||||||||||||||||||||||||||||||||||||
Total CRE loans | $ | 3,492 | $ | 2,091 | $ | 2,590 | $ | 1,057 | $ | 744 | $ | 1,919 | $ | 216 | $ | — | $ | 12,109 | ||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | Revolving Loans | Revolving Loans Converted to Term Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 740 or greater | $ | 2,154 | $ | 1,847 | $ | 819 | $ | 523 | $ | 278 | $ | 1,294 | $ | 1,297 | $ | 63 | $ | 8,275 | ||||||||||||||||||||||||||||||||||||||
FICO score 720-739 | 292 | 246 | 116 | 98 | 34 | 238 | 183 | 18 | 1,225 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 700-719 | 242 | 206 | 93 | 55 | 35 | 226 | 142 | 22 | 1,021 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 660-699 | 214 | 137 | 90 | 55 | 62 | 278 | 192 | 23 | 1,051 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 620-659 | 21 | 24 | 25 | 41 | 20 | 105 | 47 | 9 | 292 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score less than 620 | 15 | 19 | 32 | 12 | 23 | 256 | 16 | 16 | 389 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,938 | $ | 2,479 | $ | 1,175 | $ | 784 | $ | 452 | $ | 2,397 | $ | 1,877 | $ | 151 | $ | 12,253 | ||||||||||||||||||||||||||||||||||||||
136 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | Revolving Loans | Revolving Loans Converted to term loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 740 or greater | $ | 1,594 | $ | 1,156 | $ | 825 | $ | 473 | $ | 394 | $ | 1,335 | $ | 1,086 | $ | 115 | $ | 6,978 | ||||||||||||||||||||||||||||||||||||||
FICO score 720-739 | 236 | 171 | 109 | 61 | 44 | 209 | 162 | 21 | 1,013 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 700-719 | 143 | 112 | 81 | 68 | 45 | 153 | 141 | 23 | 766 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 660-699 | 164 | 131 | 120 | 106 | 44 | 246 | 204 | 44 | 1,059 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 620-659 | 42 | 36 | 55 | 23 | 13 | 118 | 66 | 27 | 380 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score less than 620 | 26 | 84 | 42 | 32 | 45 | 272 | 42 | 33 | 576 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,205 | $ | 1,690 | $ | 1,232 | $ | 763 | $ | 585 | $ | 2,333 | $ | 1,701 | $ | 263 | $ | 10,772 | ||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | Revolving Loans | Revolving Loans Converted to Term Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 740 or greater | $ | 36 | $ | 14 | $ | 10 | $ | 10 | $ | 4 | $ | 25 | $ | 291 | $ | 6 | $ | 396 | ||||||||||||||||||||||||||||||||||||||
FICO score 720-739 | 3 | 2 | 2 | 1 | — | 4 | 30 | 1 | 43 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 700-719 | 3 | 3 | 1 | 1 | — | 4 | 33 | 1 | 46 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 660-699 | 3 | 2 | 1 | 1 | 2 | 7 | 30 | 1 | 47 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 620-659 | 1 | 3 | 1 | — | — | 3 | 18 | — | 26 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score less than 620 | 7 | 6 | 6 | 10 | 7 | 71 | 174 | 1 | 282 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 53 | $ | 30 | $ | 21 | $ | 23 | $ | 13 | $ | 114 | $ | 576 | $ | 10 | $ | 840 | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | Revolving Loans | Revolving Loans Converted to Term Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 740 or greater | $ | 56 | $ | 35 | $ | 29 | $ | 23 | $ | 13 | $ | 56 | $ | 200 | $ | 11 | $ | 423 | ||||||||||||||||||||||||||||||||||||||
FICO score 720-739 | 14 | 5 | 4 | 3 | 4 | 17 | 46 | 3 | 96 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 700-719 | 8 | 5 | 4 | 4 | 3 | 17 | 42 | 1 | 84 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 660-699 | 25 | 6 | 5 | 6 | 4 | 31 | 98 | 2 | 177 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score 620-659 | 4 | 3 | 2 | 4 | 3 | 18 | 22 | 1 | 57 | |||||||||||||||||||||||||||||||||||||||||||||||
FICO score less than 620 | 24 | 3 | 3 | 4 | 4 | 16 | 18 | 1 | 73 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 131 | $ | 57 | $ | 47 | $ | 44 | $ | 31 | $ | 155 | $ | 426 | $ | 19 | $ | 910 | ||||||||||||||||||||||||||||||||||||||
137 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accruing | Non-Accruing | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Current | 30-89 Days Past Due | 90+ Days Past Due | Total Accruing | Current | 30-89 Days Past Due | 90+ Days Past Due | Total Non- Accruing | Total Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, and industrial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C&I (a) | $ | 29,309 | $ | 50 | $ | 11 | $ | 29,370 | $ | 64 | $ | 10 | $ | 79 | $ | 153 | $ | 29,523 | ||||||||||||||||||||||||||||||||||||||
Loans to mortgage companies | 2,258 | — | — | 2,258 | — | — | — | — | 2,258 | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial, financial, and industrial | 31,567 | 50 | 11 | 31,628 | 64 | 10 | 79 | 153 | 31,781 | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CRE (b) | 13,208 | 11 | — | 13,219 | 7 | — | 2 | 9 | 13,228 | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HELOC (c) | 1,967 | 12 | 5 | 1,984 | 32 | 4 | 8 | 44 | 2,028 | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate installment loans (d) | 10,079 | 25 | 13 | 10,117 | 56 | 5 | 47 | 108 | 10,225 | |||||||||||||||||||||||||||||||||||||||||||||||
Total consumer real estate | 12,046 | 37 | 18 | 12,101 | 88 | 9 | 55 | 152 | 12,253 | |||||||||||||||||||||||||||||||||||||||||||||||
Credit card and other: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit card | 287 | 5 | 4 | 296 | — | — | — | — | 296 | |||||||||||||||||||||||||||||||||||||||||||||||
Other | 540 | 2 | — | 542 | 1 | — | 1 | 2 | 544 | |||||||||||||||||||||||||||||||||||||||||||||||
Total credit card and other | 827 | 7 | 4 | 838 | 1 | — | 1 | 2 | 840 | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 57,648 | $ | 105 | $ | 33 | $ | 57,786 | $ | 160 | $ | 19 | $ | 137 | $ | 316 | $ | 58,102 | ||||||||||||||||||||||||||||||||||||||
138 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accruing | Non-Accruing | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Current | 30-89 Days Past Due | 90+ Days Past Due | Total Accruing | Current | 30-89 Days Past Due | 90+ Days Past Due | Total Non- Accruing | Total Loans and Leases | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, and industrial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C&I (a) | $ | 26,367 | $ | 53 | $ | 5 | $ | 26,425 | $ | 97 | $ | 1 | $ | 27 | $ | 125 | $ | 26,550 | ||||||||||||||||||||||||||||||||||||||
Loans to mortgage companies | 4,518 | — | — | 4,518 | — | — | — | — | 4,518 | |||||||||||||||||||||||||||||||||||||||||||||||
Total commercial, financial, and industrial | 30,885 | 53 | 5 | 30,943 | 97 | 1 | 27 | 125 | 31,068 | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CRE (b) | 12,087 | 13 | — | 12,100 | 6 | 1 | 2 | 9 | 12,109 | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer real estate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HELOC (c) | 1,906 | 7 | 6 | 1,919 | 34 | 2 | 9 | 45 | 1,964 | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate installment loans (d) | 8,658 | 30 | 27 | 8,715 | 44 | 3 | 46 | 93 | 8,808 | |||||||||||||||||||||||||||||||||||||||||||||||
Total consumer real estate | 10,564 | 37 | 33 | 10,634 | 78 | 5 | 55 | 138 | 10,772 | |||||||||||||||||||||||||||||||||||||||||||||||
Credit card and other: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit card | 292 | 2 | 2 | 296 | — | — | — | — | 296 | |||||||||||||||||||||||||||||||||||||||||||||||
Other | 608 | 3 | — | 611 | 1 | — | 2 | 3 | 614 | |||||||||||||||||||||||||||||||||||||||||||||||
Total credit card and other | 900 | 5 | 2 | 907 | 1 | — | 2 | 3 | 910 | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 54,436 | $ | 108 | $ | 40 | $ | 54,584 | $ | 182 | $ | 7 | $ | 86 | $ | 275 | $ | 54,859 | ||||||||||||||||||||||||||||||||||||||
139 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 3—LOANS & LEASES |
2022 | 2021 | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Number | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | ||||||||||||||||||||||||||||||||
C&I | 6 | $ | 30 | $ | 24 | 32 | $ | 37 | $ | 34 | ||||||||||||||||||||||||||||
CRE | 1 | 1 | 1 | 1 | 12 | 10 | ||||||||||||||||||||||||||||||||
HELOC | 98 | 7 | 7 | 25 | 3 | 3 | ||||||||||||||||||||||||||||||||
Real estate installment loans | 181 | 41 | 41 | 87 | 14 | 14 | ||||||||||||||||||||||||||||||||
Credit card and other | 81 | 12 | 12 | 51 | — | — | ||||||||||||||||||||||||||||||||
Total TDRs | 367 | $ | 91 | $ | 85 | 196 | $ | 66 | $ | 61 | ||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
(Dollars in millions) | Number | Recorded Investment | Number | Recorded Investment | ||||||||||||||||||||||
C&I | 5 | $ | — | 18 | $ | 5 | ||||||||||||||||||||
CRE | — | — | 6 | 19 | ||||||||||||||||||||||
HELOC | 22 | 1 | 1 | — | ||||||||||||||||||||||
Real estate installment loans | 54 | 15 | 9 | 5 | ||||||||||||||||||||||
Credit card and other | 17 | — | 4 | — | ||||||||||||||||||||||
Total TDRs | 98 | $ | 16 | 38 | $ | 29 | ||||||||||||||||||||
140 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 4—ALLOWANCE FOR CREDIT LOSSES |
141 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 4—ALLOWANCE FOR CREDIT LOSSES |
(Dollars in millions) | Commercial, Financial, and Industrial (a) | Commercial Real Estate | Consumer Real Estate | Credit Card and Other | Total | |||||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2022 | $ | 334 | $ | 154 | $ | 163 | $ | 19 | $ | 670 | ||||||||||||||||||||||
Charge-offs | (62) | (1) | (5) | (25) | (93) | |||||||||||||||||||||||||||
Recoveries | 9 | 1 | 19 | 5 | 34 | |||||||||||||||||||||||||||
Provision for loan and lease losses | 27 | (8) | 23 | 32 | 74 | |||||||||||||||||||||||||||
Balance as of December 31, 2022 | 308 | 146 | 200 | 31 | 685 | |||||||||||||||||||||||||||
Reserve for remaining unfunded commitments: | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2022 | 46 | 12 | 8 | — | 66 | |||||||||||||||||||||||||||
Provision for unfunded lending commitments | 9 | 10 | 2 | — | 21 | |||||||||||||||||||||||||||
Balance as of December 31, 2022 | 55 | 22 | 10 | — | 87 | |||||||||||||||||||||||||||
Allowance for credit losses as of December 31, 2022 | $ | 363 | $ | 168 | $ | 210 | $ | 31 | $ | 772 | ||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2021 | $ | 453 | $ | 242 | $ | 242 | $ | 26 | $ | 963 | ||||||||||||||||||||||
Charge-offs | (34) | (5) | (5) | (15) | (59) | |||||||||||||||||||||||||||
Recoveries | 21 | 5 | 27 | 4 | 57 | |||||||||||||||||||||||||||
Provision for loan and lease losses | (106) | (88) | (101) | 4 | (291) | |||||||||||||||||||||||||||
Balance as of December 31, 2021 | 334 | 154 | 163 | 19 | 670 | |||||||||||||||||||||||||||
Reserve for remaining unfunded commitments: | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2021 | 65 | 10 | 10 | — | 85 | |||||||||||||||||||||||||||
Provision for unfunded lending commitments | (19) | 2 | (2) | — | (19) | |||||||||||||||||||||||||||
Balance as of December 31, 2021 | 46 | 12 | 8 | — | 66 | |||||||||||||||||||||||||||
Allowance for credit losses as of December 31, 2021 | $ | 380 | $ | 166 | $ | 171 | $ | 19 | $ | 736 | ||||||||||||||||||||||
Allowance for loan and lease losses | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2020 | $ | 123 | $ | 36 | $ | 28 | $ | 13 | $ | 200 | ||||||||||||||||||||||
19 | (7) | 93 | 2 | 107 | ||||||||||||||||||||||||||||
Balance as of January 1, 2020, as adjusted | 142 | 29 | 121 | 15 | 307 | |||||||||||||||||||||||||||
Charge-offs (b) | (129) | (5) | (8) | (14) | (156) | |||||||||||||||||||||||||||
Recoveries | 9 | 4 | 18 | 5 | 36 | |||||||||||||||||||||||||||
Initial allowance on loans purchased with credit deterioration (b) | 138 | 100 | 44 | 5 | 287 | |||||||||||||||||||||||||||
Provision for loan and lease losses (c) | 293 | 114 | 67 | 15 | 489 | |||||||||||||||||||||||||||
Balance as of December 31, 2020 | 453 | 242 | 242 | 26 | 963 | |||||||||||||||||||||||||||
Reserve for remaining unfunded commitments: | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2020 | 4 | 2 | — | — | 6 | |||||||||||||||||||||||||||
17 | 1 | 6 | — | 24 | ||||||||||||||||||||||||||||
Balance as of January 1, 2020, as adjusted | 21 | 3 | 6 | — | 30 | |||||||||||||||||||||||||||
Initial reserve on loans acquired | 12 | 26 | 3 | — | 41 | |||||||||||||||||||||||||||
Provision for unfunded lending commitments | 32 | (19) | 1 | — | 14 | |||||||||||||||||||||||||||
Balance as of December 31, 2020 | 65 | 10 | 10 | — | 85 | |||||||||||||||||||||||||||
Allowance for credit losses as of December 31, 2020 | $ | 518 | $ | 252 | $ | 252 | $ | 26 | $ | 1,048 | ||||||||||||||||||||||
142 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 5—PREMISES, EQUIPMENT, & LEASES |
(Dollars in millions) | December 31, 2022 | December 31, 2021 | ||||||||||||
Land | $ | 163 | $ | 163 | ||||||||||
Buildings | 544 | 543 | ||||||||||||
Leasehold improvements | 82 | 74 | ||||||||||||
Furniture, fixtures, and equipment | 277 | 276 | ||||||||||||
Fixed assets held for sale (a) | 1 | 16 | ||||||||||||
Total premises and equipment | 1,067 | 1,072 | ||||||||||||
Less accumulated depreciation and amortization | (455) | (407) | ||||||||||||
Premises and equipment, net | $ | 612 | $ | 665 | ||||||||||
(Dollars in millions) | December 31, 2022 | December 31, 2021 | ||||||||||||
Lease right-of-use assets: | Classification | |||||||||||||
Operating lease right-of-use assets | $ | 331 | $ | 345 | ||||||||||
Finance lease right-of-use assets | 3 | 3 | ||||||||||||
Total lease right-of-use assets | $ | 334 | $ | 348 | ||||||||||
Lease liabilities: | ||||||||||||||
Operating lease liabilities | $ | 367 | $ | 382 | ||||||||||
Finance lease liabilities | 4 | 4 | ||||||||||||
Total lease liabilities | $ | 371 | $ | 386 | ||||||||||
December 31, 2022 | December 31, 2021 | ||||||||||
Weighted Average Remaining Lease Terms | |||||||||||
Operating leases | 12.22 years | 12.37 years | |||||||||
Finance leases | 9.83 years | 10.61 years | |||||||||
Weighted Average Discount Rate | |||||||||||
Operating leases | 2.69 | % | 2.35 | % | |||||||
Finance leases | 2.62 | % | 2.85 | % |
143 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 5—PREMISES, EQUIPMENT, & LEASES |
(Dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||
Lease cost | |||||||||||||||||
Operating lease cost | $ | 47 | $ | 48 | $ | 39 | |||||||||||
Sublease income | (2) | (1) | (1) | ||||||||||||||
Total lease cost | $ | 45 | $ | 47 | $ | 38 | |||||||||||
Other information | |||||||||||||||||
(Gain) loss on right-of-use asset impairment - operating leases | $ | 1 | $ | 3 | $ | 6 | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash flows from operating leases | 50 | 53 | 41 | ||||||||||||||
Right-of-use assets obtained in exchange for new lease obligations: | |||||||||||||||||
Operating leases | 31 | 19 | 216 | ||||||||||||||
Finance leases | — | — | 2 |
(Dollars in millions) | December 31, 2022 | ||||
2023 | $ | 46 | |||
2024 | 44 | ||||
2025 | 42 | ||||
2026 | 40 | ||||
2027 | 39 | ||||
2028 and thereafter | 228 | ||||
Total lease payments | 439 | ||||
Less lease liability interest | (68) | ||||
Total lease liability | $ | 371 | |||
(Dollars in millions) | December 31, 2022 | December 31, 2021 | |||||||||
Lease receivable | $ | 984 | $ | 729 | |||||||
Unearned income | (198) | (135) | |||||||||
Guaranteed residual | 121 | 97 | |||||||||
Unguaranteed residual | 153 | 102 | |||||||||
Total net investment | $ | 1,060 | $ | 793 | |||||||
144 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 5—PREMISES, EQUIPMENT, & LEASES |
145 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 6—GOODWILL & OTHER INTANGIBLE ASSETS |
(Dollars in millions) | Regional Banking | Specialty Banking | Total | |||||||||||||||||
December 31, 2019 | $ | 802 | $ | 631 | $ | 1,433 | ||||||||||||||
Additions | 78 | — | 78 | |||||||||||||||||
December 31, 2020 | $ | 880 | $ | 631 | $ | 1,511 | ||||||||||||||
Additions | — | — | — | |||||||||||||||||
December 31, 2021 | $ | 880 | $ | 631 | $ | 1,511 | ||||||||||||||
Additions | — | — | — | |||||||||||||||||
December 31, 2022 | $ | 880 | $ | 631 | $ | 1,511 | ||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||||||||||||
Core deposit intangibles | $ | 371 | $ | (171) | $ | 200 | $ | 371 | $ | (128) | $ | 243 | ||||||||||||||||||||||||||
Client relationships | 32 | (13) | 19 | 37 | (11) | 26 | ||||||||||||||||||||||||||||||||
Other (a) | 27 | (12) | 15 | 41 | (12) | 29 | ||||||||||||||||||||||||||||||||
Total | $ | 430 | $ | (196) | $ | 234 | $ | 449 | $ | (151) | $ | 298 | ||||||||||||||||||||||||||
(Dollars in millions) | ||||||||
2023 | $ | 47 | ||||||
2024 | 44 | |||||||
2025 | 38 | |||||||
2026 | 33 | |||||||
2027 | 29 |
146 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 7—MORTGAGE BANKING ACTIVITY |
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Balance at beginning of period | $ | 250 | $ | 409 | $ | 4 | ||||||||||||||
Acquired | — | — | 320 | |||||||||||||||||
Originations and purchases | 1,275 | 2,836 | 2,499 | |||||||||||||||||
Sales, net of gains | (1,481) | (3,025) | (2,405) | |||||||||||||||||
Mortgage loans transferred from (to) held for investment | — | 30 | (9) | |||||||||||||||||
Balance at end of period | $ | 44 | $ | 250 | $ | 409 | ||||||||||||||
December 31, 2022 | |||||||||||||||||
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||
Mortgage servicing rights | $ | 21 | $ | (5) | $ | 16 | |||||||||||
December 31, 2021 | |||||||||||||||||
(Dollars in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||
Mortgage servicing rights | $ | 39 | $ | (9) | $ | 30 | |||||||||||
147 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 8—DEPOSITS |
(Dollars in millions) | 2022 | 2021 | ||||||||||||
Savings | $ | 21,971 | $ | 26,457 | ||||||||||
Time deposits | 2,887 | 3,500 | ||||||||||||
Other interest-bearing deposits | 15,165 | 17,055 | ||||||||||||
Total interest-bearing deposits | 40,023 | 47,012 | ||||||||||||
Noninterest-bearing deposits | 23,466 | 27,883 | ||||||||||||
Total deposits | $ | 63,489 | $ | 74,895 | ||||||||||
148 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 9—SHORT-TERM BORROWINGS |
(Dollars in millions) | Trading Liabilities | Federal Funds Purchased | Securities Sold Under Agreements to Repurchase | Other Short-term Borrowings | ||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||
Average balance | $ | 480 | $ | 699 | $ | 881 | $ | 229 | ||||||||||||||||||
Year-end balance | 335 | 400 | 1,013 | 1,093 | ||||||||||||||||||||||
Maximum month-end outstanding | 700 | 1,023 | 1,211 | 1,093 | ||||||||||||||||||||||
Average rate for the year | 2.56 | % | 1.56 | % | 0.77 | % | 2.26 | % | ||||||||||||||||||
Average rate at year-end | 3.67 | % | 4.40 | % | 2.19 | % | 4.30 | % | ||||||||||||||||||
2021 | ||||||||||||||||||||||||||
Average balance | $ | 540 | $ | 949 | $ | 1,235 | $ | 124 | ||||||||||||||||||
Year-end balance | 426 | 775 | 1,247 | 102 | ||||||||||||||||||||||
Maximum month-end outstanding | 685 | 1,037 | 1,615 | 146 | ||||||||||||||||||||||
Average rate for the year | 1.11 | % | 0.12 | % | 0.30 | % | 0.09 | % | ||||||||||||||||||
Average rate at year-end | 1.62 | % | 0.10 | % | 0.11 | % | 0.08 | % | ||||||||||||||||||
2020 | ||||||||||||||||||||||||||
Average balance | $ | 457 | $ | 862 | $ | 1,109 | $ | 626 | ||||||||||||||||||
Year-end balance | 353 | 845 | 1,187 | 166 | ||||||||||||||||||||||
Maximum month-end outstanding | 983 | 1,487 | 1,661 | 4,061 | ||||||||||||||||||||||
Average rate for the year | 1.24 | % | 0.34 | % | 0.50 | % | 0.84 | % | ||||||||||||||||||
Average rate at year-end | 0.77 | % | 0.10 | % | 0.26 | % | 0.09 | % | ||||||||||||||||||
149 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 10—TERM BORROWINGS |
(Dollars in millions) | 2022 | 2021 | ||||||||||||
First Horizon Bank: | ||||||||||||||
Subordinated notes (a) | ||||||||||||||
Maturity date – May 1, 2030 - 5.75% | $ | 448 | $ | 447 | ||||||||||
Other collateralized borrowings - Maturity date – December 22, 2037 | ||||||||||||||
5.07% on December 31, 2022 and 0.50% on December 31, 2021 (b) | 87 | 87 | ||||||||||||
Other collateralized borrowings - SBA loans (c) | 3 | 6 | ||||||||||||
First Horizon Corporation: | ||||||||||||||
Senior notes | ||||||||||||||
Maturity date – May 26, 2023 - 3.55% | 450 | 448 | ||||||||||||
Maturity date – May 26, 2025 - 4.00% | 349 | 349 | ||||||||||||
Junior subordinated debentures (d) | ||||||||||||||
Maturity date - June 28, 2035 - 6.45% on December 31, 2022 and 1.88% on December 31, 2021 | 3 | 3 | ||||||||||||
Maturity date - December 15, 2035 - 6.14% on December 31, 2022 and 1.57% on December 31, 2021 | 18 | 18 | ||||||||||||
Maturity date - March 15, 2036 - 6.17% on December 31, 2022 and 1.60% on December 31, 2021 | 9 | 9 | ||||||||||||
Maturity date - March 15, 2036 - 6.31% on December 31, 2022 and 1.74% on December 31, 2021 | 12 | 12 | ||||||||||||
Maturity date - June 30, 2036 - 6.05% on December 31, 2022 and 1.54% on December 31, 2021 | 27 | 27 | ||||||||||||
Maturity date - July 7, 2036 - 5.63% on December 31, 2022 and 1.67% on December 31, 2021 | 18 | 18 | ||||||||||||
Maturity date - June 15, 2037 - 6.42% on December 31, 2022 and 1.85% on December 31, 2021 | 52 | 52 | ||||||||||||
Maturity date - September 6, 2037 - 6.16% on December 31, 2022 and 1.61% on December 31, 2021 | 9 | 9 | ||||||||||||
Notes payable - New market tax credit investments; 7 to 35 year term, 0.93% to 4.95% | 66 | 59 | ||||||||||||
FT Real Estate Securities Company, Inc.: | ||||||||||||||
Cumulative preferred stock (e) | ||||||||||||||
Maturity date – March 31, 2031 – 9.50% | 46 | 46 | ||||||||||||
Total | $ | 1,597 | $ | 1,590 | ||||||||||
150 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 10—TERM BORROWINGS |
(Dollars in millions) | ||||||||
2023 | $ | 450 | ||||||
2024 | 6 | |||||||
2025 | 350 | |||||||
2026 | — | |||||||
2027 and after | 812 | |||||||
151 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 11—PREFERRED STOCK |
December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||
Issuance Date | Earliest Redemption Date (a) | Annual Dividend Rate | Dividend Payments | Shares Outstanding | Liquidation Amount | Carrying Amount | Carrying Amount | ||||||||||||||||||||||||||||||||||||||||
Series B | 7/2/2020 | 8/1/2025 | 6.625 | % | (b) | Semi-annually | 8,000 | $ | 80 | $ | 77 | $ | 77 | ||||||||||||||||||||||||||||||||||
Series C | 7/2/2020 | 5/1/2026 | 6.600 | % | (c) | Quarterly | 5,750 | 58 | 59 | 59 | |||||||||||||||||||||||||||||||||||||
Series D | 7/2/2020 | 5/1/2024 | 6.100 | % | (d) | Semi-annually | 10,000 | 100 | 94 | 94 | |||||||||||||||||||||||||||||||||||||
Series E | 5/28/2020 | 10/10/2025 | 6.500 | % | Quarterly | 1,500 | 150 | 145 | 145 | ||||||||||||||||||||||||||||||||||||||
Series F | 5/3/2021 | 7/10/2026 | 4.700 | % | Quarterly | 1,500 | 150 | 145 | 145 | ||||||||||||||||||||||||||||||||||||||
Series G | 2/28/2022 | 2/28/2027 | N/A | N/A | 4,936 | 494 | 494 | — | |||||||||||||||||||||||||||||||||||||||
31,686 | $ | 1,032 | $ | 1,014 | $ | 520 | |||||||||||||||||||||||||||||||||||||||||
152 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 12—REGULATORY CAPITAL & RESTRICTIONS |
(Dollars in millions) | First Horizon Corporation | First Horizon Bank | ||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||
On December 31, 2022 | ||||||||||||||||||||||||||
Actual: | ||||||||||||||||||||||||||
Total Capital | $ | 9,222 | 13.33 | % | $ | 8,532 | 12.41 | % | ||||||||||||||||||
Tier 1 Capital | 8,247 | 11.92 | 7,700 | 11.20 | ||||||||||||||||||||||
Common Equity Tier 1 | 7,032 | 10.17 | 7,405 | 10.77 | ||||||||||||||||||||||
Leverage | 8,247 | 10.36 | 7,700 | 9.76 | ||||||||||||||||||||||
Minimum Requirement for Capital Adequacy Purposes: | ||||||||||||||||||||||||||
Total Capital | 5,533 | 8.00 | 5,498 | 8.00 | ||||||||||||||||||||||
Tier 1 Capital | 4,150 | 6.00 | 4,124 | 6.00 | ||||||||||||||||||||||
Common Equity Tier 1 | 3,112 | 4.50 | 3,093 | 4.50 | ||||||||||||||||||||||
Leverage | 3,183 | 4.00 | 3,157 | 4.00 | ||||||||||||||||||||||
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions: | ||||||||||||||||||||||||||
Total Capital | 6,873 | 10.00 | ||||||||||||||||||||||||
Tier 1 Capital | 5,498 | 8.00 | ||||||||||||||||||||||||
Common Equity Tier 1 | 4,467 | 6.50 | ||||||||||||||||||||||||
Leverage | 3,946 | 5.00 | ||||||||||||||||||||||||
On December 31, 2021 | ||||||||||||||||||||||||||
Actual: | ||||||||||||||||||||||||||
Total Capital | $ | 7,918 | 12.34 | % | $ | 7,893 | 12.41 | % | ||||||||||||||||||
Tier 1 Capital | 7,088 | 11.04 | 7,133 | 11.22 | ||||||||||||||||||||||
Common Equity Tier 1 | 6,367 | 9.92 | 6,838 | 10.75 | ||||||||||||||||||||||
Leverage | 7,088 | 8.08 | 7,133 | 8.20 | ||||||||||||||||||||||
153 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 12—REGULATORY CAPITAL & RESTRICTIONS |
Minimum Requirement for Capital Adequacy Purposes: | ||||||||||||||||||||||||||
Total Capital | 5,135 | 8.00 | 5,088 | 8.00 | ||||||||||||||||||||||
Tier 1 Capital | 3,851 | 6.00 | 3,816 | 6.00 | ||||||||||||||||||||||
Common Equity Tier 1 | 2,888 | 4.50 | 2,862 | 4.50 | ||||||||||||||||||||||
Leverage | 3,507 | 4.00 | 3,478 | 4.00 | ||||||||||||||||||||||
Minimum Requirement to be Well Capitalized Under Prompt Corrective Action Provisions: | ||||||||||||||||||||||||||
Total Capital | 6,360 | 10.00 | ||||||||||||||||||||||||
Tier 1 Capital | 5,088 | 8.00 | ||||||||||||||||||||||||
Common Equity Tier 1 | 4,134 | 6.50 | ||||||||||||||||||||||||
Leverage | 4,348 | 5.00 |
154 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 13—COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) |
(Dollars in millions) | Securities AFS | Cash Flow Hedges | Pension and Post-retirement Plans | Total | ||||||||||||||||||||||
Balance as of December 31, 2019 | $ | 31 | $ | 3 | $ | (273) | $ | (239) | ||||||||||||||||||
Net unrealized gains (losses) | 74 | 15 | 3 | 92 | ||||||||||||||||||||||
Amounts reclassified from AOCI | 3 | (6) | 10 | 7 | ||||||||||||||||||||||
Other comprehensive income (loss) | 77 | 9 | 13 | 99 | ||||||||||||||||||||||
Balance as of December 31, 2020 | $ | 108 | $ | 12 | $ | (260) | $ | (140) | ||||||||||||||||||
Net unrealized gains (losses) | (144) | (3) | (2) | (149) | ||||||||||||||||||||||
Amounts reclassified from AOCI | — | (7) | 8 | 1 | ||||||||||||||||||||||
Other comprehensive income (loss) | (144) | (10) | 6 | (148) | ||||||||||||||||||||||
Balance as of December 31, 2021 | $ | (36) | $ | 2 | $ | (254) | $ | (288) | ||||||||||||||||||
Net unrealized gains (losses) | $ | (937) | $ | (144) | $ | (22) | $ | (1,103) | ||||||||||||||||||
Amounts reclassified from AOCI | — | 15 | 8 | 23 | ||||||||||||||||||||||
Other comprehensive income (loss) | (937) | (129) | (14) | (1,080) | ||||||||||||||||||||||
Balance as of December 31, 2022 | $ | (973) | $ | (127) | $ | (268) | $ | (1,368) | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Details about AOCI | 2022 | 2021 | 2020 | Affected line item in the statement where net income is presented | ||||||||||||||||||||||
Securities AFS: | ||||||||||||||||||||||||||
Realized (gains) losses on securities AFS | $ | — | $ | — | $ | 4 | Securities gains (losses), net | |||||||||||||||||||
Tax expense (benefit) | — | — | (1) | Income tax expense | ||||||||||||||||||||||
— | — | 3 | ||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||
Realized (gains) losses on cash flow hedges | 20 | (9) | (8) | Interest and fees on loans and leases | ||||||||||||||||||||||
Tax expense (benefit) | (5) | 2 | 2 | Income tax expense | ||||||||||||||||||||||
15 | (7) | (6) | ||||||||||||||||||||||||
Pension and Postretirement Plans: | ||||||||||||||||||||||||||
Amortization of prior service cost and net actuarial (gain) loss | 10 | 10 | 13 | Other expense | ||||||||||||||||||||||
Tax expense (benefit) | (2) | (2) | (3) | Income tax expense | ||||||||||||||||||||||
8 | 8 | 10 | ||||||||||||||||||||||||
Total reclassification from AOCI | $ | 23 | $ | 1 | $ | 7 | ||||||||||||||||||||
155 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 14—INCOME TAXES |
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Consolidated Statements of Income: | ||||||||||||||||||||
Income tax expense | $ | 247 | $ | 274 | $ | 76 | ||||||||||||||
Consolidated Statements of Changes in Equity: | ||||||||||||||||||||
Income tax expense (benefit) related to: | ||||||||||||||||||||
Net unrealized gains (losses) on pension and other postretirement plans | (5) | 2 | 3 | |||||||||||||||||
Net unrealized gains (losses) on securities available for sale | (302) | (46) | 25 | |||||||||||||||||
Net unrealized gains (losses) on cash flow hedges | (42) | (3) | 3 | |||||||||||||||||
Total | $ | (102) | $ | 227 | $ | 107 | ||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Current: | ||||||||||||||||||||
Federal | $ | 123 | $ | 235 | $ | 80 | ||||||||||||||
State | 33 | 39 | 14 | |||||||||||||||||
Deferred: | ||||||||||||||||||||
Federal | 87 | (1) | (15) | |||||||||||||||||
State | 4 | 1 | (3) | |||||||||||||||||
Total | $ | 247 | $ | 274 | $ | 76 | ||||||||||||||
156 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 14—INCOME TAXES |
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Federal income tax rate | 21 | % | 21 | % | 21 | % | ||||||||||||||
Tax computed at statutory rate | $ | 243 | $ | 270 | $ | 196 | ||||||||||||||
Increase (decrease) resulting from: | ||||||||||||||||||||
State income taxes, net of federal income tax benefit | 31 | 32 | 9 | |||||||||||||||||
Bank-owned life insurance | (4) | (7) | (6) | |||||||||||||||||
401(k) – employee stock ownership plan | (1) | (1) | (1) | |||||||||||||||||
Tax-exempt interest | (10) | (10) | (8) | |||||||||||||||||
Non-deductible expenses | 11 | 8 | 13 | |||||||||||||||||
LIHTC credits and benefits, net of amortization | (16) | (14) | (9) | |||||||||||||||||
Other tax credits | (4) | (4) | (5) | |||||||||||||||||
Other changes in unrecognized tax benefits | (2) | 4 | (9) | |||||||||||||||||
Purchase accounting gain | — | — | (112) | |||||||||||||||||
Other | (1) | (4) | 8 | |||||||||||||||||
Total | $ | 247 | $ | 274 | $ | 76 | ||||||||||||||
(Dollars in millions) | Expiration Dates | Net Deferred Tax Asset Balance | ||||||||||||
Losses - federal | 2026 - 2035 | $ | 34 | |||||||||||
Net operating losses - states | 2027 - 2042 | 2 | ||||||||||||
157 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 14—INCOME TAXES |
(Dollars in millions) | 2022 | 2021 | ||||||||||||
Deferred tax assets: | ||||||||||||||
Loan valuations and loss reserves | $ | 108 | $ | 161 | ||||||||||
Employee benefits | 93 | 83 | ||||||||||||
Accrued expenses | 22 | 16 | ||||||||||||
Depreciation and amortization | 24 | 13 | ||||||||||||
Lease liability | 91 | 94 | ||||||||||||
Federal loss carryforwards | 34 | 38 | ||||||||||||
State loss carryforwards | 2 | 2 | ||||||||||||
Securities available-for-sale and financial instruments (a) | 355 | 12 | ||||||||||||
Other | 32 | 29 | ||||||||||||
Gross deferred tax assets | 761 | 448 | ||||||||||||
Deferred tax liabilities: | ||||||||||||||
Equity investments | $ | 3 | $ | 4 | ||||||||||
Other intangible assets | 80 | 86 | ||||||||||||
Prepaid expenses | 17 | 18 | ||||||||||||
ROU lease asset | 82 | 85 | ||||||||||||
Leasing | 265 | 198 | ||||||||||||
Other | 1 | 5 | ||||||||||||
Gross deferred tax liabilities | 448 | 396 | ||||||||||||
Net deferred tax assets | $ | 313 | $ | 52 | ||||||||||
(Dollars in millions) | ||||||||
Balance at December 31, 2020 | $ | 70 | ||||||
Increases related to prior year tax positions | 24 | |||||||
Increases related to current year tax positions | 1 | |||||||
Lapse of statutes | (3) | |||||||
Balance at December 31, 2021 | $ | 92 | ||||||
Increases related to prior year tax positions | 3 | |||||||
Increases related to current year tax positions | 1 | |||||||
Decreases related to prior year tax positions | (7) | |||||||
Balance at December 31, 2022 | $ | 89 | ||||||
158 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 15—EARNINGS PER SHARE |
(Dollars in millions, except per share data; shares in thousands) | 2022 | 2021 | 2020 | |||||||||||||||||
Net income | $ | 912 | $ | 1,010 | $ | 857 | ||||||||||||||
Net income attributable to noncontrolling interest | 12 | 11 | 12 | |||||||||||||||||
Net income attributable to controlling interest | 900 | 999 | 845 | |||||||||||||||||
Preferred stock dividends | 32 | 37 | 23 | |||||||||||||||||
Net income available to common shareholders | 868 | 962 | 822 | |||||||||||||||||
Weighted average common shares outstanding—basic | 535,033 | 546,354 | 432,125 | |||||||||||||||||
Effect of dilutive restricted stock, performance equity awards and options | 7,830 | 4,887 | 1,592 | |||||||||||||||||
Effect of dilutive convertible preferred stock (a) | 23,141 | — | — | |||||||||||||||||
Weighted average common shares outstanding—diluted | 566,004 | 551,241 | 433,717 | |||||||||||||||||
Basic earnings per common share | $ | 1.62 | $ | 1.76 | $ | 1.90 | ||||||||||||||
Diluted earnings per common share | $ | 1.53 | $ | 1.74 | $ | 1.89 | ||||||||||||||
(a) On February 28, 2022, FHN issued $494 million of Series G Convertible Preferred Stock, which is convertible into common stock upon completion of the Pending TD Merger or the termination of the TD Merger Agreement. For more information on the convertible features, including the conversion rate, see Note 11 - Preferred Stock. |
(Shares in thousands) | 2022 | 2021 | 2020 | |||||||||||||||||
Stock options excluded from the calculation of diluted EPS | 29 | 1,366 | 4,595 | |||||||||||||||||
Weighted average exercise price of stock options excluded from the calculation of diluted EPS | $ | 25.64 | $ | 20.44 | $ | 17.47 | ||||||||||||||
Other equity awards excluded from the calculation of diluted EPS | 144 | 1,531 | 3,639 |
159 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 16—CONTINGENCIES & OTHER DISCLOSURES |
160 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 16—CONTINGENCIES & OTHER DISCLOSURES |
161 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS |
162 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS |
Benefit Obligations | Net Periodic Benefit Cost | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Discount rate | ||||||||||||||||||||||||||||||||||||||
Qualified pension | 5.20% | 2.95% | 2.63% | 2.96% | 2.64% | 3.31% | ||||||||||||||||||||||||||||||||
Nonqualified pension | 5.10% | 2.65% | 2.24% | 2.65% | 2.24% | 3.08% | ||||||||||||||||||||||||||||||||
Other nonqualified pension | 4.94% | 1.99% | 1.41% | 1.99% | 1.41% | 2.57% | ||||||||||||||||||||||||||||||||
Postretirement benefits | 5.04% - 5.25% | 2.43% - 3.07% | 1.92% - 2.81% | 2.42% - 5.08% | 1.93% - 2.81% | 2.87% - 3.44% | ||||||||||||||||||||||||||||||||
Expected long-term rate of return | ||||||||||||||||||||||||||||||||||||||
Qualified pension/ postretirement benefits | N/A | N/A | N/A | 2.85% | 2.30% | 3.45% | ||||||||||||||||||||||||||||||||
Postretirement benefit (retirees post January 1, 1993) | N/A | N/A | N/A | 5.95% | 5.80% | 6.40% | ||||||||||||||||||||||||||||||||
Postretirement benefit (retirees prior to January 1, 1993) | N/A | N/A | N/A | 1.05% | 1.00% | 0.90% |
(Dollars in millions) | Pension Benefits | Other Benefits | ||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Components of net periodic benefit cost | ||||||||||||||||||||||||||||||||||||||
Interest cost | $ | 20 | $ | 17 | $ | 24 | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||||||||||||||
Expected return on plan assets | (24) | (20) | (26) | (2) | (1) | (1) | ||||||||||||||||||||||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||||||||||||||||
Actuarial (gain) loss | 12 | 10 | 13 | — | — | — | ||||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 8 | $ | 7 | $ | 11 | $ | (1) | $ | — | $ | — | ||||||||||||||||||||||||||
163 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS |
(Dollars in millions) | Pension Benefits | Other Benefits | ||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||||
Benefit obligation, beginning of year | $ | 845 | $ | 893 | $ | 41 | $ | 46 | ||||||||||||||||||
Interest cost | 20 | 17 | 1 | 1 | ||||||||||||||||||||||
Actuarial (gain) loss (a) | (163) | (26) | (9) | (5) | ||||||||||||||||||||||
Actual benefits paid | (39) | (39) | (1) | (1) | ||||||||||||||||||||||
Benefit obligation, end of year | $ | 663 | $ | 845 | $ | 32 | $ | 41 | ||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||
Fair value of plan assets, beginning of year | $ | 849 | $ | 896 | $ | 26 | $ | 23 | ||||||||||||||||||
Actual return on plan assets | (172) | (18) | (4) | 3 | ||||||||||||||||||||||
Employer contributions | 3 | 10 | 1 | 1 | ||||||||||||||||||||||
Actual benefits paid – settlement payments | (2) | (3) | (2) | (1) | ||||||||||||||||||||||
Actual benefits paid – other payments | (1) | (2) | — | — | ||||||||||||||||||||||
Premium paid for annuity purchase (b) | (36) | (34) | — | — | ||||||||||||||||||||||
Fair value of plan assets, end of year | $ | 641 | $ | 849 | $ | 21 | $ | 26 | ||||||||||||||||||
Funded (unfunded) status of the plans | $ | (22) | $ | 4 | $ | (11) | $ | (15) | ||||||||||||||||||
Amounts recognized in the Balance Sheets | ||||||||||||||||||||||||||
Other assets | $ | 4 | $ | 37 | $ | 19 | $ | 23 | ||||||||||||||||||
Other liabilities | (26) | (33) | (30) | (38) | ||||||||||||||||||||||
Net asset (liability) at end of year | $ | (22) | $ | 4 | $ | (11) | $ | (15) | ||||||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Projected benefit obligation | $ | 26 | $ | 33 | $ | 30 | $ | 38 |
164 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS |
(Dollars in millions) | Pension Benefits | Other Benefits | ||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Amounts recognized in accumulated other comprehensive income | ||||||||||||||||||||||||||
Net actuarial (gain) loss | $ | 363 | $ | 342 | $ | (8) | $ | (6) | ||||||||||||||||||
(Dollars in millions) | Pension Benefits | Other Benefits | ||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Changes in plan assets and benefit obligation recognized in other comprehensive income | ||||||||||||||||||||||||||||||||||||||
Net actuarial (gain) loss arising during measurement period | $ | 32 | $ | 13 | $ | (8) | $ | (3) | $ | (7) | $ | 3 | ||||||||||||||||||||||||||
Items amortized during the measurement period: | ||||||||||||||||||||||||||||||||||||||
Net actuarial gain (loss) | (11) | (10) | (13) | — | — | — | ||||||||||||||||||||||||||||||||
Total recognized in other comprehensive income | $ | 21 | $ | 3 | $ | (21) | $ | (3) | $ | (7) | $ | 3 | ||||||||||||||||||||||||||
(Dollars in millions) | Pension Benefits | Other Benefits | ||||||||||||
2023 | $ | 42 | $ | 2 | ||||||||||
2024 | 44 | 2 | ||||||||||||
2025 | 45 | 2 | ||||||||||||
2026 | 47 | 2 | ||||||||||||
2027 | 47 | 2 | ||||||||||||
2028-2032 | 238 | 12 |
165 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 17—RETIREMENT PLANS & OTHER EMPLOYEE BENEFITS |
(Dollars in millions) | December 31, 2022 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Cash equivalents and money market funds | $ | 20 | $ | — | $ | — | $ | 20 | ||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||
U.S. treasuries | — | 15 | — | 15 | ||||||||||||||||||||||
Corporate, municipal and foreign bonds | — | 300 | — | 300 | ||||||||||||||||||||||
Common and collective funds: | ||||||||||||||||||||||||||
Fixed income | — | 306 | — | 306 | ||||||||||||||||||||||
Total | $ | 20 | $ | 621 | $ | — | $ | 641 | ||||||||||||||||||
(Dollars in millions) | December 31, 2021 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Cash equivalents and money market funds | $ | 45 | $ | — | $ | — | $ | 45 | ||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||
U.S. treasuries | — | 15 | — | 15 | ||||||||||||||||||||||
Corporate, municipal and foreign bonds | — | 445 | — | 445 | ||||||||||||||||||||||
Common and collective funds: | ||||||||||||||||||||||||||
Fixed income | — | 344 | — | 344 | ||||||||||||||||||||||
Total | $ | 45 | $ | 804 | $ | — | $ | 849 | ||||||||||||||||||
(Dollars in millions) | December 31, 2022 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Mutual funds: | ||||||||||||||||||||||||||
Equity mutual funds | $ | 6 | $ | — | $ | — | $ | 6 | ||||||||||||||||||
Fixed income mutual funds | 15 | — | — | 15 | ||||||||||||||||||||||
Total | $ | 21 | $ | — | $ | — | $ | 21 | ||||||||||||||||||
(Dollars in millions) | December 31, 2021 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Mutual funds: | ||||||||||||||||||||||||||
Equity mutual funds | $ | 17 | $ | — | $ | — | $ | 17 | ||||||||||||||||||
Fixed income mutual funds | 9 | — | — | 9 | ||||||||||||||||||||||
Total | $ | 26 | $ | — | $ | — | $ | 26 | ||||||||||||||||||
166 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 18—STOCK OPTIONS, RESTRICTED STOCK, & DIVIDEND REINVESTMENT PLANS |
167 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 18—STOCK OPTIONS, RESTRICTED STOCK, & DIVIDEND REINVESTMENT PLANS |
Shares/ Units (a) | Weighted average grant date fair value (per share) (b) | |||||||||||||
January 1, 2022 | 9,296,888 | $ | 13.14 | |||||||||||
Shares/units granted | 6,363,454 | 20.64 | ||||||||||||
Shares/units vested/distributed | (2,085,465) | 11.09 | ||||||||||||
Shares/units canceled | (541,231) | 18.01 | ||||||||||||
December 31, 2022 | 13,033,646 | $ | 17.09 | |||||||||||
Options Outstanding | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (millions) | |||||||||||||||||||||||
January 1, 2022 | 4,980,929 | $ | 15.81 | |||||||||||||||||||||||
Options granted | — | — | ||||||||||||||||||||||||
Options exercised | (2,349,432) | 15.36 | ||||||||||||||||||||||||
Options expired/canceled | (194,051) | 22.35 | ||||||||||||||||||||||||
December 31, 2022 | 2,437,446 | $ | 15.72 | 3.42 | $ | 21 | ||||||||||||||||||||
Options exercisable | 1,836,692 | 15.76 | 2.88 | 16 | ||||||||||||||||||||||
Options expected to vest | 600,754 | 15.59 | 5.05 | 5 |
168 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 18—STOCK OPTIONS, RESTRICTED STOCK, & DIVIDEND REINVESTMENT PLANS |
2021 | 2020 | |||||||||||||
Expected dividend yield | 4.16% | 3.77% | ||||||||||||
Expected weighted-average lives of options granted | 6.29 years | 6.25 years | ||||||||||||
Expected weighted-average volatility | 38.44% | 23.94% | ||||||||||||
Expected volatility range | 37.86% - 39.02% | 23.32% - 24.56% | ||||||||||||
Risk-free interest rate | 0.62% | 1.47% |
169 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 19—BUSINESS SEGMENT INFORMATION |
2022 | ||||||||||||||||||||||||||
(Dollars in millions) | Regional Banking | Specialty Banking | Corporate | Consolidated | ||||||||||||||||||||||
Net interest income (expense) | $ | 1,954 | $ | 557 | $ | (119) | $ | 2,392 | ||||||||||||||||||
Provision for credit losses | 94 | 14 | (13) | 95 | ||||||||||||||||||||||
Noninterest income (a) | 444 | 311 | 60 | 815 | ||||||||||||||||||||||
Noninterest expense (b)(f) | 1,234 | 440 | 279 | 1,953 | ||||||||||||||||||||||
Income (loss) before income taxes | 1,070 | 414 | (325) | 1,159 | ||||||||||||||||||||||
Income tax expense (benefit) | 251 | 101 | (105) | 247 | ||||||||||||||||||||||
Net income (loss) | $ | 819 | $ | 313 | $ | (220) | $ | 912 | ||||||||||||||||||
Average assets | $ | 42,295 | $ | 19,967 | $ | 21,955 | $ | 84,217 | ||||||||||||||||||
Depreciation and amortization | 11 | (7) | 60 | 64 | ||||||||||||||||||||||
Expenditures for long-lived assets | 18 | 12 | (6) | 24 |
170 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 19—BUSINESS SEGMENT INFORMATION |
2021 | ||||||||||||||||||||||||||
(Dollars in millions) | Regional Banking | Specialty Banking | Corporate | Consolidated | ||||||||||||||||||||||
Net interest income (expense) | $ | 1,764 | $ | 620 | $ | (390) | $ | 1,994 | ||||||||||||||||||
Provision for credit losses | (229) | (64) | (17) | (310) | ||||||||||||||||||||||
Noninterest income | 438 | 597 | 41 | 1,076 | ||||||||||||||||||||||
Noninterest expense (b)(c)(f) | 1,139 | 571 | 386 | 2,096 | ||||||||||||||||||||||
Income (loss) before income taxes | 1,292 | 710 | (718) | 1,284 | ||||||||||||||||||||||
Income tax expense (benefit) | 303 | 171 | (200) | 274 | ||||||||||||||||||||||
Net income (loss) | $ | 989 | $ | 539 | $ | (518) | $ | 1,010 | ||||||||||||||||||
Average assets | $ | 41,527 | $ | 20,789 | $ | 25,293 | $ | 87,609 | ||||||||||||||||||
Depreciation and amortization | (67) | (3) | 98 | 28 | ||||||||||||||||||||||
Expenditures for long-lived assets | 27 | 3 | 7 | 37 |
2020 | ||||||||||||||||||||||||||
(Dollars in millions) | Regional Banking | Specialty Banking | Corporate | Consolidated | ||||||||||||||||||||||
Net interest income (expense) | $ | 1,287 | $ | 576 | $ | (201) | $ | 1,662 | ||||||||||||||||||
Provision for credit losses (e) | 392 | 116 | (5) | 503 | ||||||||||||||||||||||
Noninterest income (a) | 345 | 576 | 571 | 1,492 | ||||||||||||||||||||||
Noninterest expense (b)(c)(d) | 903 | 498 | 317 | 1,718 | ||||||||||||||||||||||
Income (loss) before income taxes | 337 | 538 | 58 | 933 | ||||||||||||||||||||||
Income tax expense (benefit) | 73 | 131 | (128) | 76 | ||||||||||||||||||||||
Net income (loss) | $ | 264 | $ | 407 | $ | 186 | $ | 857 | ||||||||||||||||||
Average assets | $ | 31,890 | $ | 19,809 | $ | 12,647 | $ | 64,346 | ||||||||||||||||||
Depreciation and amortization | (39) | 3 | 82 | 46 | ||||||||||||||||||||||
Expenditures for long-lived assets | 283 | 6 | 90 | 379 |
171 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 19—BUSINESS SEGMENT INFORMATION |
December 31, 2022 | ||||||||||||||||||||||||||
(Dollars in millions) | Regional Banking | Specialty Banking | Corporate | Consolidated | ||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Fixed income (a) | $ | — | $ | 205 | $ | — | $ | 205 | ||||||||||||||||||
Deposit transactions and cash management | 153 | 10 | 8 | 171 | ||||||||||||||||||||||
Brokerage, management fees and commissions | 92 | — | — | 92 | ||||||||||||||||||||||
Card and digital banking fees | 75 | 2 | 7 | 84 | ||||||||||||||||||||||
Mortgage banking and title income | — | 68 | — | 68 | ||||||||||||||||||||||
Other service charges and fees | 32 | 22 | — | 54 | ||||||||||||||||||||||
Trust services and investment management | 48 | — | — | 48 | ||||||||||||||||||||||
Securities gains (losses), net (b) | — | — | 18 | 18 | ||||||||||||||||||||||
Other income (c) | 44 | 4 | 27 | 75 | ||||||||||||||||||||||
Total noninterest income | $ | 444 | $ | 311 | $ | 60 | $ | 815 | ||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||
(Dollars in millions) | Regional Banking | Specialty Banking | Corporate | Consolidated | ||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Fixed income (a) | $ | — | $ | 406 | $ | — | $ | 406 | ||||||||||||||||||
Deposit transactions and cash management | 157 | 12 | 6 | 175 | ||||||||||||||||||||||
Brokerage, management fees and commissions | 88 | — | — | 88 | ||||||||||||||||||||||
Card and digital banking fees | 67 | 3 | 8 | 78 | ||||||||||||||||||||||
Mortgage banking and title income | — | 152 | 2 | 154 | ||||||||||||||||||||||
Other service charges and fees | 23 | 17 | 4 | 44 | ||||||||||||||||||||||
Trust services and investment management | 51 | — | — | 51 | ||||||||||||||||||||||
Securities gains (losses), net (b) | — | — | 13 | 13 | ||||||||||||||||||||||
Purchase accounting gain | — | — | (1) | (1) | ||||||||||||||||||||||
Other income (c) | 52 | 7 | 9 | 68 | ||||||||||||||||||||||
Total noninterest income | $ | 438 | $ | 597 | $ | 41 | $ | 1,076 | ||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
(Dollars in millions) | Regional Banking | Specialty Banking | Corporate | Consolidated | ||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Fixed income (a) | $ | 1 | $ | 422 | $ | — | $ | 423 | ||||||||||||||||||
Deposit transactions and cash management | 131 | 11 | 6 | 148 | ||||||||||||||||||||||
Brokerage, management fees and commissions | 66 | — | — | 66 | ||||||||||||||||||||||
Card and digital banking fees | 50 | 2 | 8 | 60 | ||||||||||||||||||||||
Mortgage banking and title income | — | 128 | 1 | 129 | ||||||||||||||||||||||
Other service charges and fees | 18 | 7 | 1 | 26 | ||||||||||||||||||||||
Trust services and investment management | 39 | — | — | 39 | ||||||||||||||||||||||
Securities gains (losses), net (b) | — | — | (6) | (6) | ||||||||||||||||||||||
Purchase accounting gain | — | — | 533 | 533 | ||||||||||||||||||||||
Other income (c) | 40 | 6 | 28 | 74 | ||||||||||||||||||||||
Total noninterest income | $ | 345 | $ | 576 | $ | 571 | $ | 1,492 | ||||||||||||||||||
172 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 20—VARIABLE INTEREST ENTITIES |
(Dollars in millions) | December 31, 2022 | December 31, 2021 | ||||||||||||
Assets: | ||||||||||||||
Other assets | $ | 181 | $ | 205 | ||||||||||
Liabilities: | ||||||||||||||
Other liabilities | $ | 150 | $ | 179 | ||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Income tax expense (benefit): | ||||||||||||||||||||
Amortization of qualifying LIHTC investments | $ | 44 | $ | 26 | $ | 23 | ||||||||||||||
Low income housing tax credits | (48) | (32) | (22) | |||||||||||||||||
Other tax benefits related to qualifying LIHTC investments | (12) | (7) | (10) |
173 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 20—VARIABLE INTEREST ENTITIES |
174 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 20—VARIABLE INTEREST ENTITIES |
(Dollars in millions) | Maximum Loss Exposure | Liability Recognized | Classification | |||||||||||||||||
Type: | ||||||||||||||||||||
Low income housing partnerships | $ | 463 | $ | 154 | (a) | |||||||||||||||
Other tax credit investments (b) | 85 | 67 | Other assets | |||||||||||||||||
Small issuer trust preferred holdings (c) | 171 | — | Loans and leases | |||||||||||||||||
On-balance sheet trust preferred securitization | 27 | 87 | (d) | |||||||||||||||||
Holdings of agency mortgage-backed securities (c) | 8,652 | — | (e) | |||||||||||||||||
Commercial loan troubled debt restructurings (f) | 53 | — | Loans and leases | |||||||||||||||||
Proprietary trust preferred issuances (g) | — | 167 | Term borrowings |
(Dollars in millions) | Maximum Loss Exposure | Liability Recognized | Classification | |||||||||||||||||
Type: | ||||||||||||||||||||
Low income housing partnerships | $ | 382 | $ | 129 | (a) | |||||||||||||||
Other tax credit investments (b) | 77 | 56 | Other assets | |||||||||||||||||
Small issuer trust preferred holdings (c) | 195 | — | Loans and leases | |||||||||||||||||
On-balance sheet trust preferred securitization | 27 | 87 | (d) | |||||||||||||||||
Holdings of agency mortgage-backed securities (c) | 8,550 | — | (e) | |||||||||||||||||
Commercial loan troubled debt restructurings (f) | 98 | — | Loans and leases | |||||||||||||||||
Proprietary trust preferred issuances (g) | — | 167 | Term borrowings |
175 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
176 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
December 31, 2022 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Customer interest rate contracts | $ | 3,076 | $ | 3 | $ | 270 | ||||||||||||||
Offsetting upstream interest rate contracts | 3,076 | 91 | 6 | |||||||||||||||||
Option contracts purchased | 40 | — | — | |||||||||||||||||
Forwards and futures purchased | 1,127 | 5 | 2 | |||||||||||||||||
Forwards and futures sold | 1,256 | 4 | 5 |
December 31, 2021 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Customer interest rate contracts | $ | 3,587 | $ | 84 | $ | 41 | ||||||||||||||
Offsetting upstream interest rate contracts | 3,587 | 4 | 8 | |||||||||||||||||
Option contracts purchased | 13 | — | — | |||||||||||||||||
Forwards and futures purchased | 4,430 | 2 | 9 | |||||||||||||||||
Forwards and futures sold | 5,044 | 10 | 2 |
177 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
December 31, 2022 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Customer Interest Rate Contracts Hedging | ||||||||||||||||||||
Hedging Instruments and Hedged Items: | ||||||||||||||||||||
Customer interest rate contracts | $ | 8,377 | $ | 3 | $ | 570 | ||||||||||||||
Offsetting upstream interest rate contracts | 8,377 | 351 | 5 | |||||||||||||||||
December 31, 2021 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Customer Interest Rate Contracts Hedging | ||||||||||||||||||||
Hedging Instruments and Hedged Items: | ||||||||||||||||||||
Customer interest rate contracts | $ | 8,037 | $ | 202 | $ | 29 | ||||||||||||||
Offsetting upstream interest rate contracts | 8,037 | 4 | 15 | |||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
(Dollars in millions) | Gains (Losses) | Gains (Losses) | Gains (Losses) | |||||||||||||||||
Customer Interest Rate Contracts Hedging | ||||||||||||||||||||
Hedging Instruments and Hedged Items: | ||||||||||||||||||||
Customer interest rate contracts (a) | $ | (744) | $ | (268) | $ | 357 | ||||||||||||||
Offsetting upstream interest rate contracts (a) | 744 | 268 | (357) | |||||||||||||||||
Debt Hedging | ||||||||||||||||||||
Hedging Instruments: | ||||||||||||||||||||
Interest rate swaps (b) | $ | — | $ | — | $ | 2 | ||||||||||||||
Hedged Items: | ||||||||||||||||||||
Term borrowings (a) (c) | — | — | (2) |
178 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
December 31, 2022 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||
Hedging Instruments: | ||||||||||||||||||||
Interest rate contracts | $ | 5,350 | $ | — | $ | 71 | ||||||||||||||
Hedged Items: | ||||||||||||||||||||
Variability in cash flows related to debt instruments (primarily loans) | N/A | $ | 5,350 | N/A |
December 31, 2021 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||
Hedging Instruments: | ||||||||||||||||||||
Interest rate contracts | $ | 1,100 | $ | 13 | $ | — | ||||||||||||||
Hedged Items: | ||||||||||||||||||||
Variability in cash flows related to debt instruments (primarily loans) | N/A | $ | 1,100 | N/A |
Year Ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
(Dollars in millions) | Gains (Losses) | Gains (Losses) | Gains (Losses) | |||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||
Hedging Instruments: | ||||||||||||||||||||
Interest rate contracts (a) | $ | 195 | $ | 29 | $ | 3 | ||||||||||||||
Gain (loss) recognized in other comprehensive income (loss) | 15 | (3) | 15 | |||||||||||||||||
Gain (loss) reclassified from AOCI into interest income | (129) | (7) | (6) |
December 31, 2022 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Mortgage Banking Hedges | ||||||||||||||||||||
Option contracts written | $ | 35 | $ | — | $ | — | ||||||||||||||
Forward contracts written | 61 | — | — |
179 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
December 31, 2021 | ||||||||||||||||||||
(Dollars in millions) | Notional | Assets | Liabilities | |||||||||||||||||
Mortgage Banking Hedges | ||||||||||||||||||||
Option contracts written | $ | 241 | $ | 4 | $ | — | ||||||||||||||
Forward contracts written | 404 | — | — |
Year Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||||||||
(Dollars in millions) | Gains (Losses) | Gains (Losses) | Gains (Losses) | ||||||||||||||||||||
Mortgage Banking Hedges | |||||||||||||||||||||||
Option contracts written | $ | 3 | $ | 15 | $ | 15 | |||||||||||||||||
Forward contracts written | 32 | 11 | (37) |
180 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
181 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 21—DERIVATIVES |
Gross amounts not offset in the Balance Sheets | ||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheets | Derivative liabilities available for offset | Collateral received | Net amount | |||||||||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Interest rate derivative contracts | $ | 449 | $ | — | $ | 449 | $ | (58) | $ | (378) | $ | 13 | ||||||||||||||||||||||||||
Forward contracts | 9 | — | 9 | (6) | (2) | 1 | ||||||||||||||||||||||||||||||||
$ | 458 | $ | — | $ | 458 | $ | (64) | $ | (380) | $ | 14 | |||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Interest rate derivative contracts | $ | 311 | $ | — | $ | 311 | $ | (32) | $ | (181) | $ | 98 | ||||||||||||||||||||||||||
Forward contracts | 12 | — | 12 | (4) | (3) | 5 | ||||||||||||||||||||||||||||||||
$ | 323 | $ | — | $ | 323 | $ | (36) | $ | (184) | $ | 103 | |||||||||||||||||||||||||||
Gross amounts not offset in the Balance Sheets | ||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheets | Derivative assets available for offset | Collateral pledged | Net amount | |||||||||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Interest rate derivative contracts | $ | 921 | $ | — | $ | 921 | $ | (58) | $ | (175) | $ | 688 | ||||||||||||||||||||||||||
Forward contracts | 8 | — | 8 | (6) | (1) | 1 | ||||||||||||||||||||||||||||||||
$ | 929 | $ | — | $ | 929 | $ | (64) | $ | (176) | $ | 689 | |||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Interest rate derivative contracts | $ | 93 | $ | — | $ | 93 | $ | (32) | $ | (38) | $ | 23 | ||||||||||||||||||||||||||
Forward contracts | 10 | — | 10 | (4) | (1) | 5 | ||||||||||||||||||||||||||||||||
$ | 103 | $ | — | $ | 103 | $ | (36) | $ | (39) | $ | 28 | |||||||||||||||||||||||||||
182 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 22—MASTER NETTING & SIMILAR AGREEMENTS |
Gross amounts not offset in the Balance Sheets | ||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheets | Net amounts of assets presented in the Balance Sheets | Offsetting securities sold under agreements to repurchase | Securities collateral (not recognized on FHN’s Balance Sheets) | Net amount | ||||||||||||||||||||||||||||||||
Securities purchased under agreements to resell: | ||||||||||||||||||||||||||||||||||||||
2022 | $ | 353 | $ | — | $ | 353 | $ | (10) | $ | (340) | $ | 3 | ||||||||||||||||||||||||||
2021 | 488 | — | 488 | (10) | (476) | 2 | ||||||||||||||||||||||||||||||||
Gross amounts not offset in the Balance Sheets | ||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheets | Net amounts of liabilities presented in the Balance Sheets | Offsetting securities purchased under agreements to resell | Securities/ government guaranteed loans collateral | Net amount | ||||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase: | ||||||||||||||||||||||||||||||||||||||
2022 | $ | 1,013 | $ | — | $ | 1,013 | $ | (10) | $ | (1,003) | $ | — | ||||||||||||||||||||||||||
2021 | 1,247 | — | 1,247 | (10) | (1,237) | — | ||||||||||||||||||||||||||||||||
183 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 22—MASTER NETTING & SIMILAR AGREEMENTS |
December 31, 2022 | |||||||||||||||||
(Dollars in millions) | Overnight and Continuous | Up to 30 Days | Total | ||||||||||||||
Securities sold under agreements to repurchase: | |||||||||||||||||
U.S. treasuries | $ | 10 | $ | — | $ | 10 | |||||||||||
Government agency issued MBS | 851 | — | 851 | ||||||||||||||
Government agency issued CMO | 122 | — | 122 | ||||||||||||||
Other U.S. government agencies | 30 | — | 30 | ||||||||||||||
Total securities sold under agreements to repurchase | $ | 1,013 | $ | — | $ | 1,013 | |||||||||||
December 31, 2021 | |||||||||||||||||
(Dollars in millions) | Overnight and Continuous | Up to 30 Days | Total | ||||||||||||||
Securities sold under agreements to repurchase: | |||||||||||||||||
U.S. treasuries | $ | 33 | $ | — | $ | 33 | |||||||||||
Government agency issued MBS | 1,068 | — | 1,068 | ||||||||||||||
Other U.S. government agencies | 31 | — | 31 | ||||||||||||||
Government guaranteed loans (SBA and USDA) | 115 | — | 115 | ||||||||||||||
Total securities sold under agreements to repurchase | $ | 1,247 | $ | — | $ | 1,247 | |||||||||||
184 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
185 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
December 31, 2022 | ||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||
U.S. treasuries | $ | — | $ | 101 | $ | — | $ | 101 | ||||||||||||||||||
Government agency issued MBS | — | 144 | — | 144 | ||||||||||||||||||||||
Government agency issued CMO | — | 61 | — | 61 | ||||||||||||||||||||||
Other U.S. government agencies | — | 115 | — | 115 | ||||||||||||||||||||||
States and municipalities | — | 54 | — | 54 | ||||||||||||||||||||||
Corporate and other debt | — | 875 | — | 875 | ||||||||||||||||||||||
Interest-only strips (elected fair value) | — | — | 25 | 25 | ||||||||||||||||||||||
Total trading securities | — | 1,350 | 25 | 1,375 | ||||||||||||||||||||||
Loans held for sale (elected fair value) | — | 29 | 22 | 51 | ||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||
Government agency issued MBS | — | 4,763 | — | 4,763 | ||||||||||||||||||||||
Government agency issued CMO | — | 2,313 | — | 2,313 | ||||||||||||||||||||||
Other U.S. government agencies | — | 1,163 | — | 1,163 | ||||||||||||||||||||||
States and municipalities | — | 597 | — | 597 | ||||||||||||||||||||||
Total securities available for sale | — | 8,836 | — | 8,836 | ||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||
Deferred compensation mutual funds | 112 | — | — | 112 | ||||||||||||||||||||||
Equity, mutual funds, and other | 22 | — | — | 22 | ||||||||||||||||||||||
Derivatives, forwards and futures | 9 | — | — | 9 | ||||||||||||||||||||||
Derivatives, interest rate contracts | — | 449 | — | 449 | ||||||||||||||||||||||
Derivatives, other | — | 2 | — | 2 | ||||||||||||||||||||||
Total other assets | 143 | 451 | — | 594 | ||||||||||||||||||||||
Total assets | $ | 143 | $ | 10,666 | $ | 47 | $ | 10,856 | ||||||||||||||||||
Trading liabilities: | ||||||||||||||||||||||||||
U.S. treasuries | $ | — | $ | 275 | $ | — | $ | 275 | ||||||||||||||||||
Government issued agency MBS | — | 2 | — | 2 | ||||||||||||||||||||||
Corporate and other debt | — | 58 | — | 58 | ||||||||||||||||||||||
Total trading liabilities | — | 335 | — | 335 | ||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||
Derivatives, forwards and futures | 8 | — | — | 8 | ||||||||||||||||||||||
Derivatives, interest rate contracts | — | 922 | — | 922 | ||||||||||||||||||||||
Derivatives, other | — | 1 | 27 | 28 | ||||||||||||||||||||||
Total other liabilities | 8 | 923 | 27 | 958 | ||||||||||||||||||||||
Total liabilities | $ | 8 | $ | 1,258 | $ | 27 | $ | 1,293 | ||||||||||||||||||
186 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
December 31, 2021 | ||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||
U.S. treasuries | $ | — | $ | 85 | $ | — | $ | 85 | ||||||||||||||||||
Government agency issued MBS | — | 464 | — | 464 | ||||||||||||||||||||||
Government agency issued CMO | — | 62 | — | 62 | ||||||||||||||||||||||
Other U.S. government agencies | — | 276 | — | 276 | ||||||||||||||||||||||
States and municipalities | — | 34 | — | 34 | ||||||||||||||||||||||
Corporate and other debt | — | 642 | — | 642 | ||||||||||||||||||||||
Interest-only strips (elected fair value) | — | — | 38 | 38 | ||||||||||||||||||||||
Total trading securities | — | 1,563 | 38 | 1,601 | ||||||||||||||||||||||
Loans held for sale (elected fair value) | — | 230 | 28 | 258 | ||||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||||||||
Government agency issued MBS | — | 5,055 | — | 5,055 | ||||||||||||||||||||||
Government agency issued CMO | — | 2,257 | — | 2,257 | ||||||||||||||||||||||
Other U.S. government agencies | — | 850 | — | 850 | ||||||||||||||||||||||
States and municipalities | — | 545 | — | 545 | ||||||||||||||||||||||
Total securities available for sale | — | 8,707 | — | 8,707 | ||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||
Deferred compensation mutual funds | 125 | — | — | 125 | ||||||||||||||||||||||
Equity, mutual funds, and other | 25 | — | — | 25 | ||||||||||||||||||||||
Derivatives, forwards and futures | 12 | — | — | 12 | ||||||||||||||||||||||
Derivatives, interest rate contracts | — | 311 | — | 311 | ||||||||||||||||||||||
Derivatives, other | — | 1 | — | 1 | ||||||||||||||||||||||
Total other assets | 162 | 312 | — | 474 | ||||||||||||||||||||||
Total assets | $ | 162 | $ | 10,812 | $ | 66 | $ | 11,040 | ||||||||||||||||||
Trading liabilities: | ||||||||||||||||||||||||||
U.S. treasuries | $ | — | $ | 334 | $ | — | $ | 334 | ||||||||||||||||||
Government agency issued MBS | — | 1 | — | 1 | ||||||||||||||||||||||
Corporate and other debt | — | 91 | — | 91 | ||||||||||||||||||||||
Total trading liabilities | — | 426 | — | 426 | ||||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||||||||
Derivatives, forwards and futures | 11 | — | — | 11 | ||||||||||||||||||||||
Derivatives, interest rate contracts | — | 93 | — | 93 | ||||||||||||||||||||||
Derivatives, other | — | 1 | 23 | 24 | ||||||||||||||||||||||
Total other liabilities | 11 | 94 | 23 | 128 | ||||||||||||||||||||||
Total liabilities | $ | 11 | $ | 520 | $ | 23 | $ | 554 | ||||||||||||||||||
187 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
Year Ended December 31, 2022 | |||||||||||||||||||||||
(Dollars in millions) | Interest-only strips | Loans held for sale | Net derivative liabilities | ||||||||||||||||||||
Balance on January 1, 2022 | $ | 38 | $ | 28 | $ | (23) | |||||||||||||||||
(7) | — | (23) | |||||||||||||||||||||
Purchases | — | 2 | — | ||||||||||||||||||||
Sales | (76) | (12) | — | ||||||||||||||||||||
Settlements | — | (2) | 19 | ||||||||||||||||||||
Repayments | — | (1) | — | ||||||||||||||||||||
Net transfers into (out of) Level 3 | 70 | (b) | 7 | — | |||||||||||||||||||
Balance on December 31, 2022 | $ | 25 | $ | 22 | $ | (27) | |||||||||||||||||
$ | (2) | (c) | $ | — | (a) | $ | (23) | (d) |
Year Ended December 31, 2021 | |||||||||||||||||||||||||||||
(Dollars in millions) | Interest-only strips | Loans held for sale | Loans held for investment | Net derivative liabilities | |||||||||||||||||||||||||
Balance on January 1, 2021 | $ | 32 | $ | 12 | $ | 16 | $ | (14) | |||||||||||||||||||||
3 | 1 | — | (19) | ||||||||||||||||||||||||||
Purchases | — | 10 | — | — | |||||||||||||||||||||||||
Sales | (68) | (18) | — | — | |||||||||||||||||||||||||
Settlements | — | (3) | (2) | 10 | |||||||||||||||||||||||||
Net transfers into (out of) Level 3 | 71 | (b) | 26 | (e) | (14) | (e) | — | ||||||||||||||||||||||
Balance on December 31, 2021 | $ | 38 | $ | 28 | $ | — | $ | (23) | |||||||||||||||||||||
$ | (2) | (c) | $ | 1 | (a) | $ | — | $ | (19) | (d) |
Year Ended December 31, 2020 | |||||||||||||||||||||||||||||||||||
(Dollars in millions) | Trading securities | Interest-only strips- AFS | Loans held for sale | Loans held for investment | Net derivative liabilities | ||||||||||||||||||||||||||||||
Balance on January 1, 2020 | $ | 1 | $ | 19 | $ | 14 | $ | — | $ | (23) | |||||||||||||||||||||||||
Acquired | — | — | — | 14 | — | ||||||||||||||||||||||||||||||
(1) | (6) | 1 | — | (1) | |||||||||||||||||||||||||||||||
Purchases | — | 6 | — | — | — | ||||||||||||||||||||||||||||||
Sales | — | (11) | — | (4) | — | ||||||||||||||||||||||||||||||
Settlements | — | — | (3) | (3) | 10 | ||||||||||||||||||||||||||||||
Net transfers into (out of) Level 3 | — | 24 | (b) | — | 9 | — | |||||||||||||||||||||||||||||
Balance on December 31, 2020 | $ | — | $ | 32 | $ | 12 | $ | 16 | $ | (14) | |||||||||||||||||||||||||
$ | — | (a) | $ | (4) | (c) | $ | 1 | (a) | $ | — | $ | (1) | (d) |
188 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
Carrying value at December 31, 2022 | Year Ended December 31, 2022 | |||||||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | Net gains (losses) | |||||||||||||||||||||||||||
Loans held for sale—SBAs and USDA | $ | — | $ | 506 | $ | — | $ | 506 | $ | (3) | ||||||||||||||||||||||
Loans and leases (a) | — | — | 135 | 135 | (19) | |||||||||||||||||||||||||||
OREO (b) | — | — | 3 | 3 | — | |||||||||||||||||||||||||||
Other assets (c) | — | — | 43 | 43 | (6) | |||||||||||||||||||||||||||
$ | (28) | |||||||||||||||||||||||||||||||
Carrying value at December 31, 2021 | Year Ended December 31, 2021 | |||||||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | Net gains (losses) | |||||||||||||||||||||||||||
Loans held for sale—SBAs and USDA | $ | — | $ | 852 | $ | 1 | $ | 853 | $ | (2) | ||||||||||||||||||||||
Loans held for sale—first mortgages | — | — | 1 | 1 | — | |||||||||||||||||||||||||||
Loans and leases (a) | — | — | 84 | 84 | (13) | |||||||||||||||||||||||||||
OREO (b) | — | — | 3 | 3 | (1) | |||||||||||||||||||||||||||
Other assets (c) | — | — | 30 | 30 | (2) | |||||||||||||||||||||||||||
$ | (18) | |||||||||||||||||||||||||||||||
Carrying value at December 31, 2020 | Year Ended December 31, 2020 | |||||||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | Net gains (losses) | |||||||||||||||||||||||||||
Loans held for sale—SBAs and USDA | $ | — | $ | 508 | $ | 1 | $ | 509 | $ | (3) | ||||||||||||||||||||||
Loans held for sale—first mortgages | — | — | 1 | 1 | — | |||||||||||||||||||||||||||
Loans and leases (a) | — | — | 77 | 77 | (12) | |||||||||||||||||||||||||||
OREO (b) | — | — | 15 | 15 | (1) | |||||||||||||||||||||||||||
Other assets (c) | — | — | 9 | 9 | (2) | |||||||||||||||||||||||||||
$ | (18) | |||||||||||||||||||||||||||||||
189 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
(Dollars in millions) | Values Utilized | |||||||||||||||||||||||||||||||
Level 3 Class | Fair Value at December 31, 2022 | Valuation Techniques | Unobservable Input | Range | Weighted Average (d) | |||||||||||||||||||||||||||
Trading securities - SBA interest-only strips | $ | 25 | Discounted cash flow | Constant prepayment rate | 12%-13% | 12% | ||||||||||||||||||||||||||
Bond equivalent yield | 17% | 17% | ||||||||||||||||||||||||||||||
Loans held for sale - residential real estate | $ | 22 | Discounted cash flow | Prepayment speeds - First mortgage | 2% - 8% | 3% | ||||||||||||||||||||||||||
Foreclosure losses | 63% - 75% | 65% | ||||||||||||||||||||||||||||||
Loss severity trends - First mortgage | 0% - 11% of UPB | 5% | ||||||||||||||||||||||||||||||
Derivative liabilities, other | $ | 27 | Discounted cash flow | Visa covered litigation resolution amount | $5.6 billion - $6.0 billion | $5.9 billion | ||||||||||||||||||||||||||
Probability of resolution scenarios | 5% - 25% | 20% | ||||||||||||||||||||||||||||||
Time until resolution | 12 - 42 months | 28 months | ||||||||||||||||||||||||||||||
Loans and leases (a) | $ | 135 | Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 10% of appraisal | NM | ||||||||||||||||||||||||||
Other collateral valuations | Borrowing base certificates adjustment | 20% - 50% of gross value | NM | |||||||||||||||||||||||||||||
Financial Statements/Auction values adjustment | 0% - 25% of reported value | NM | ||||||||||||||||||||||||||||||
OREO (b) | $ | 3 | Appraisals from comparable properties | Adjustment for value changes since appraisal | 0% - 10% of appraisal | NM | ||||||||||||||||||||||||||
Other assets (c) | $ | 43 | Discounted cash flow | Adjustments to current sales yields for specific properties | 0% - 15% adjustment to yield | NM | ||||||||||||||||||||||||||
Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 25% of appraisal | NM |
190 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
(Dollars in millions) | Values Utilized | |||||||||||||||||||||||||||||||
Level 3 Class | Fair Value at December 31, 2021 | Valuation Techniques | Unobservable Input | Range | Weighted Average (d) | |||||||||||||||||||||||||||
Trading securities - SBA interest-only strips | $ | 38 | Discounted cash flow | Constant prepayment rate | 11% - 12% | 11% | ||||||||||||||||||||||||||
Bond equivalent yield | 11% - 14% | 11% | ||||||||||||||||||||||||||||||
Loans held for sale - residential real estate | $ | 29 | Discounted cash flow | Prepayment speeds - First mortgage | 4% - 12% | 5% | ||||||||||||||||||||||||||
Foreclosure losses | 54% - 66% | 65% | ||||||||||||||||||||||||||||||
Loss severity trends - First mortgage | 1% - 14% of UPB | 8% | ||||||||||||||||||||||||||||||
Loans held for sale - unguaranteed interest in SBA loans | $ | 1 | Discounted cash flow | Constant prepayment rate | 8% - 12% | 10% | ||||||||||||||||||||||||||
Bond equivalent yield | 11% | 11% | ||||||||||||||||||||||||||||||
Derivative liabilities, other | $ | 23 | Discounted cash flow | Visa covered litigation resolution amount | $5.8 billion - $6.2 billion | $6.0 billion | ||||||||||||||||||||||||||
Probability of resolution scenarios | 15% - 35% | 24% | ||||||||||||||||||||||||||||||
Time until resolution | 12 - 36 months | 25 months | ||||||||||||||||||||||||||||||
Loans and leases (a) | $ | 84 | Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 10% of appraisal | NM | ||||||||||||||||||||||||||
Other collateral valuations | Borrowing base certificates adjustment | 20% - 50% of gross value | NM | |||||||||||||||||||||||||||||
Financial Statements/Auction values adjustment | 0% - 25% of reported value | NM | ||||||||||||||||||||||||||||||
OREO (b) | $ | 3 | Appraisals from comparable properties | Adjustment for value changes since appraisal | 0% - 10% of appraisal | NM | ||||||||||||||||||||||||||
Other assets (c) | $ | 30 | Discounted cash flow | Adjustments to current sales yields for specific properties | 0% - 15% adjustment to yield | NM | ||||||||||||||||||||||||||
Appraisals from comparable properties | Marketability adjustments for specific properties | 0% - 25% of appraisal | NM |
191 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
192 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
December 31, 2022 | ||||||||||||||||||||
(Dollars in millions) | Fair value carrying amount | Aggregate unpaid principal | Fair value carrying amount less aggregate unpaid principal | |||||||||||||||||
Residential real estate loans held for sale reported at fair value: | ||||||||||||||||||||
Total loans | $ | 51 | $ | 58 | $ | (7) | ||||||||||||||
Nonaccrual loans | 5 | 8 | (3) | |||||||||||||||||
Loans 90 days or more past due and still accruing | 1 | 1 | — | |||||||||||||||||
December 31, 2021 | ||||||||||||||||||||
(Dollars in millions) | Fair value carrying amount | Aggregate unpaid principal | Fair value carrying amount less aggregate unpaid principal | |||||||||||||||||
Residential real estate loans held for sale reported at fair value: | ||||||||||||||||||||
Total loans | $ | 258 | $ | 264 | $ | (6) | ||||||||||||||
Nonaccrual loans | 4 | 7 | (3) | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | ||||||||||||||
Changes in fair value included in net income: | |||||||||||||||||
Mortgage banking and title noninterest income | |||||||||||||||||
Loans held for sale | $ | (9) | $ | (10) | $ | 4 | |||||||||||
193 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
194 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
195 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
196 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
December 31, 2022 | ||||||||||||||||||||||||||||||||
Book Value | Fair Value | |||||||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Loans and leases, net of allowance for loan and lease losses | ||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Commercial, financial and industrial | $ | 31,473 | $ | — | $ | — | $ | 31,329 | $ | 31,329 | ||||||||||||||||||||||
Commercial real estate | 13,082 | — | — | 12,909 | 12,909 | |||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Consumer real estate | 12,053 | — | — | 11,934 | 11,934 | |||||||||||||||||||||||||||
Credit card and other | 809 | — | — | 810 | 810 | |||||||||||||||||||||||||||
Total loans and leases, net of allowance for loan and lease losses | 57,417 | — | — | 56,982 | 56,982 | |||||||||||||||||||||||||||
Short-term financial assets: | ||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | 1,384 | 1,384 | — | — | 1,384 | |||||||||||||||||||||||||||
Federal funds sold | 129 | — | 129 | — | 129 | |||||||||||||||||||||||||||
Securities purchased under agreements to resell | 353 | — | 353 | — | 353 | |||||||||||||||||||||||||||
Total short-term financial assets | 1,866 | 1,384 | 482 | — | 1,866 | |||||||||||||||||||||||||||
Trading securities (a) | 1,375 | — | 1,350 | 25 | 1,375 | |||||||||||||||||||||||||||
Loans held for sale: | ||||||||||||||||||||||||||||||||
Mortgage loans (elected fair value) (a) | 51 | — | 29 | 22 | 51 | |||||||||||||||||||||||||||
USDA & SBA loans - LOCOM | 506 | — | 512 | — | 512 | |||||||||||||||||||||||||||
Mortgage loans - LOCOM | 33 | — | — | 33 | 33 | |||||||||||||||||||||||||||
Total loans held for sale | 590 | — | 541 | 55 | 596 | |||||||||||||||||||||||||||
Securities available for sale (a) | 8,836 | — | 8,836 | — | 8,836 | |||||||||||||||||||||||||||
Securities held to maturity | 1,371 | — | 1,209 | — | 1,209 | |||||||||||||||||||||||||||
Derivative assets (a) | 460 | 9 | 451 | — | 460 | |||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Tax credit investments | 547 | — | — | 542 | 542 | |||||||||||||||||||||||||||
Deferred compensation mutual funds | 112 | 112 | — | — | 112 | |||||||||||||||||||||||||||
Equity, mutual funds, and other (b) | 275 | 22 | — | 253 | 275 | |||||||||||||||||||||||||||
Total other assets | 934 | 134 | — | 795 | 929 | |||||||||||||||||||||||||||
Total assets | $ | 72,849 | $ | — | $ | 12,869 | $ | 57,857 | $ | 70,726 | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Defined maturity deposits | $ | 2,887 | $ | — | $ | 2,890 | $ | — | $ | 2,890 | ||||||||||||||||||||||
Trading liabilities (a) | 335 | — | 335 | — | 335 | |||||||||||||||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||||||||||||||||
Federal funds purchased | 400 | — | 400 | — | 400 | |||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 1,013 | — | 1,013 | — | 1,013 | |||||||||||||||||||||||||||
Other short-term borrowings | 1,093 | — | 1,093 | — | 1,093 | |||||||||||||||||||||||||||
Total short-term financial liabilities | 2,506 | — | 2,506 | — | 2,506 | |||||||||||||||||||||||||||
Term borrowings: | ||||||||||||||||||||||||||||||||
Real estate investment trust-preferred | 46 | — | — | 47 | 47 | |||||||||||||||||||||||||||
Term borrowings—new market tax credit investment | 66 | — | — | 59 | 59 | |||||||||||||||||||||||||||
Secured borrowings | 3 | — | — | 3 | 3 | |||||||||||||||||||||||||||
Junior subordinated debentures | 148 | — | — | 150 | 150 | |||||||||||||||||||||||||||
Other long term borrowings | 1,334 | — | 1,301 | — | 1,301 | |||||||||||||||||||||||||||
Total term borrowings | 1,597 | — | 1,301 | 259 | 1,560 | |||||||||||||||||||||||||||
Derivative liabilities (a) | 958 | 8 | 923 | 27 | 958 | |||||||||||||||||||||||||||
Total liabilities | $ | 8,283 | $ | 8 | $ | 7,955 | $ | 286 | $ | 8,249 | ||||||||||||||||||||||
197 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
December 31, 2021 | ||||||||||||||||||||||||||||||||
Book Value | Fair Value | |||||||||||||||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Loans and leases, net of allowance for loan and lease losses | ||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||
Commercial, financial and industrial | $ | 30,734 | $ | — | $ | — | $ | 31,020 | $ | 31,020 | ||||||||||||||||||||||
Commercial real estate | 11,955 | — | — | 11,986 | 11,986 | |||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||
Consumer real estate | 10,609 | — | — | 11,111 | 11,111 | |||||||||||||||||||||||||||
Credit card and other | 891 | — | — | 906 | 906 | |||||||||||||||||||||||||||
Total loans and leases, net of allowance for loan and lease losses | 54,189 | — | — | 55,023 | 55,023 | |||||||||||||||||||||||||||
Short-term financial assets: | ||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | 14,907 | 14,907 | — | — | 14,907 | |||||||||||||||||||||||||||
Federal funds sold | 153 | — | 153 | — | 153 | |||||||||||||||||||||||||||
Securities purchased under agreements to resell | 488 | — | 488 | — | 488 | |||||||||||||||||||||||||||
Total short-term financial assets | 15,548 | 14,907 | 641 | — | 15,548 | |||||||||||||||||||||||||||
Trading securities (a) | 1,601 | — | 1,563 | 38 | 1,601 | |||||||||||||||||||||||||||
Loans held for sale: | ||||||||||||||||||||||||||||||||
Mortgage loans (elected fair value) (a) | 258 | — | 230 | 28 | 258 | |||||||||||||||||||||||||||
USDA & SBA loans - LOCOM | 853 | — | 855 | 1 | 856 | |||||||||||||||||||||||||||
Other loans - LOCOM | 24 | — | 24 | — | 24 | |||||||||||||||||||||||||||
Mortgage loans - LOCOM | 37 | — | — | 37 | 37 | |||||||||||||||||||||||||||
Total loans held for sale | 1,172 | — | 1,109 | 66 | 1,175 | |||||||||||||||||||||||||||
Securities available for sale (a) | 8,707 | — | 8,707 | — | 8,707 | |||||||||||||||||||||||||||
Securities held to maturity | 712 | — | 705 | — | 705 | |||||||||||||||||||||||||||
Derivative assets (a) | 324 | 12 | 312 | — | 324 | |||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Tax credit investments | 456 | — | — | 450 | 450 | |||||||||||||||||||||||||||
Deferred compensation mutual funds | 125 | 125 | — | — | 125 | |||||||||||||||||||||||||||
Equity, mutual funds, and other (b) | 257 | 25 | — | 232 | 257 | |||||||||||||||||||||||||||
Total other assets | 838 | 150 | — | 682 | 832 | |||||||||||||||||||||||||||
Total assets | $ | 83,091 | $ | 15,069 | $ | 13,037 | $ | 55,809 | $ | 83,915 | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Defined maturity deposits | $ | 3,500 | $ | — | $ | 3,524 | $ | — | $ | 3,524 | ||||||||||||||||||||||
Trading liabilities (a) | 426 | — | 426 | — | 426 | |||||||||||||||||||||||||||
Short-term financial liabilities: | ||||||||||||||||||||||||||||||||
Federal funds purchased | 775 | — | 775 | — | 775 | |||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 1,247 | — | 1,247 | — | 1,247 | |||||||||||||||||||||||||||
Other short-term borrowings | 102 | — | 102 | — | 102 | |||||||||||||||||||||||||||
Total short-term financial liabilities | 2,124 | — | 2,124 | — | 2,124 | |||||||||||||||||||||||||||
Term borrowings: | ||||||||||||||||||||||||||||||||
Real estate investment trust-preferred | 46 | — | — | 47 | 47 | |||||||||||||||||||||||||||
Term borrowings—new market tax credit investment | 59 | — | — | 58 | 58 | |||||||||||||||||||||||||||
Secured borrowings | 6 | — | — | 6 | 6 | |||||||||||||||||||||||||||
Junior subordinated debentures | 148 | — | — | 150 | 150 | |||||||||||||||||||||||||||
Other long term borrowings | 1,331 | — | 1,452 | — | 1,452 | |||||||||||||||||||||||||||
Total term borrowings | 1,590 | — | 1,452 | 261 | 1,713 | |||||||||||||||||||||||||||
Derivative liabilities (a) | 128 | 11 | 94 | 23 | 128 | |||||||||||||||||||||||||||
Total liabilities | $ | 7,768 | $ | 11 | $ | 7,620 | $ | 284 | $ | 7,915 | ||||||||||||||||||||||
198 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 23—FAIR VALUE OF ASSETS AND LIABILITIES |
Contractual Amount | Fair Value | |||||||||||||||||||||||||
(Dollars in millions) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Unfunded Commitments: | ||||||||||||||||||||||||||
Loan commitments | $ | 25,953 | $ | 24,229 | $ | 1 | $ | 1 | ||||||||||||||||||
Standby and other commitments | 754 | 810 | 7 | 6 |
199 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 24—PARENT COMPANY FINANCIAL INFORMATION |
Balance Sheets | December 31, | |||||||||||||
(Dollars in millions) | 2022 | 2021 | ||||||||||||
Assets: | ||||||||||||||
Cash | $ | 1,335 | $ | 724 | ||||||||||
Notes receivable | 3 | 3 | ||||||||||||
Investments in subsidiaries: | ||||||||||||||
Bank | 7,861 | 8,381 | ||||||||||||
Non-bank | 42 | 65 | ||||||||||||
Other assets | 251 | 291 | ||||||||||||
Total assets | $ | 9,492 | $ | 9,464 | ||||||||||
Liabilities and equity: | ||||||||||||||
Accrued employee benefits and other liabilities | $ | 293 | $ | 321 | ||||||||||
Term borrowings | 948 | 944 | ||||||||||||
Total liabilities | 1,241 | 1,265 | ||||||||||||
Total equity | 8,251 | 8,199 | ||||||||||||
Total liabilities and equity | $ | 9,492 | $ | 9,464 | ||||||||||
Year Ended December 31, | ||||||||||||||||||||
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Dividend income: | ||||||||||||||||||||
Bank | $ | 435 | $ | 770 | $ | 180 | ||||||||||||||
Non-bank | 16 | — | — | |||||||||||||||||
Total dividend income | 451 | 770 | 180 | |||||||||||||||||
Other income (loss) | 22 | (26) | — | |||||||||||||||||
Total income | 473 | 744 | 180 | |||||||||||||||||
Interest expense - term borrowings | 31 | 31 | 39 | |||||||||||||||||
Personnel and other expense | 128 | 89 | 54 | |||||||||||||||||
Total expense | 159 | 120 | 93 | |||||||||||||||||
Income before income taxes | 314 | 624 | 87 | |||||||||||||||||
Income tax benefit | (31) | (35) | (18) | |||||||||||||||||
Income before equity in undistributed net income of subsidiaries | 345 | 659 | 105 | |||||||||||||||||
Equity in undistributed net income (loss) of subsidiaries: | ||||||||||||||||||||
Bank | 561 | 332 | 736 | |||||||||||||||||
Non-bank | (6) | 8 | 4 | |||||||||||||||||
Net income attributable to the controlling interest | $ | 900 | $ | 999 | $ | 845 | ||||||||||||||
200 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA | ||||||||
NOTE 24—PARENT COMPANY FINANCIAL INFORMATION |
(Dollars in millions) | 2022 | 2021 | 2020 | |||||||||||||||||
Operating activities: | ||||||||||||||||||||
Net income | $ | 900 | $ | 999 | $ | 845 | ||||||||||||||
Less undistributed net income of subsidiaries | 555 | 340 | 740 | |||||||||||||||||
Income before undistributed net income of subsidiaries | 345 | 659 | 105 | |||||||||||||||||
Adjustments to reconcile income to net cash provided by operating activities: | ||||||||||||||||||||
Deferred income tax expense | 7 | 8 | 5 | |||||||||||||||||
Stock-based compensation expense | 76 | 43 | 32 | |||||||||||||||||
Loss on extinguishment of debt | — | 26 | — | |||||||||||||||||
Gain on sale of title services business | (22) | — | — | |||||||||||||||||
Other operating activities, net | 2 | (11) | 25 | |||||||||||||||||
Total adjustments | 63 | 66 | 62 | |||||||||||||||||
Net cash provided by operating activities | 408 | 725 | 167 | |||||||||||||||||
Investing activities: | ||||||||||||||||||||
Proceeds from sales and prepayments of securities | 8 | 3 | — | |||||||||||||||||
Purchases of securities | (1) | (10) | (5) | |||||||||||||||||
(Investment in) return on subsidiary | 13 | 8 | (2) | |||||||||||||||||
Cash received for business combination, net | — | — | 103 | |||||||||||||||||
Proceeds from business divestitures, net | 22 | — | — | |||||||||||||||||
Net cash provided by investing activities | 42 | 1 | 96 | |||||||||||||||||
Financing activities: | ||||||||||||||||||||
Proceeds from issuance of preferred stock | 494 | 145 | 144 | |||||||||||||||||
Call of preferred stock | — | (100) | — | |||||||||||||||||
Cash dividends paid - preferred stock | (32) | (33) | (17) | |||||||||||||||||
Common stock: | ||||||||||||||||||||
Stock options exercised | 36 | 28 | 7 | |||||||||||||||||
Cash dividends paid | (324) | (333) | (222) | |||||||||||||||||
Repurchase of shares | (13) | (416) | (4) | |||||||||||||||||
Proceeds from issuance of term borrowings | — | — | 795 | |||||||||||||||||
Repayment of term borrowings | — | (120) | (500) | |||||||||||||||||
Other financing activities, net | — | — | (8) | |||||||||||||||||
Net cash provided by (used in) financing activities | 161 | (829) | 195 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 611 | (103) | 458 | |||||||||||||||||
Cash and cash equivalents at beginning of year | 724 | 827 | 369 | |||||||||||||||||
Cash and cash equivalents at end of year | $ | 1,335 | $ | 724 | $ | 827 | ||||||||||||||
Total interest paid | $ | 35 | $ | 35 | $ | 33 | ||||||||||||||
Income taxes received from subsidiaries | 42 | 28 | 33 |
201 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 9. ACCOUNTANTS, ITEM 9A. CONTROLS & PROCEDURES, ITEM 9B. OTHER INFO, AND ITEM 9C. FOREIGN INSPECTIONS | ||||||||
202 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 10. DIRECTORS & EXECUTIVE OFFICERS | ||||||||
PART III |
Item 10 Topics | Incorporated Disclosures | ||||
Directors and nominees for director of FHN, the Audit Committee of our Board of Directors, members of the Audit Committee, and Audit Committee financial experts | In our 2023 Proxy Statement: Independence & Categorical Standards, Committee Charters & Composition, Audit Committee, and Vote Item 1—Election of Directors (excluding the Audit Committee Report and the statements regarding the existence and location of the Audit Committee’s charter) | ||||
Executive officers | In the Supplemental Part I Information following Item 4 of this report: Executive Officers of the Registrant, beginning on page 54 | ||||
Compliance with Section 16(a) of the Securities Exchange Act of 1934 | In our 2023 Proxy Statement: Delinquent Section 16(a) Reports |
203 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 10. DIRECTORS & EXECUTIVE OFFICERS | ||||||||
Harry V. Barton, Jr. Age 68 CPA and Owner, Barton Advisory Services, LLC, an investment advisory firm | John N. Casbon Age 74 Retired Executive Vice President, First American Title Insurance Company, a title insurance company | John C. Compton Age 61 Partner, Clayton, Dubilier & Rice a private equity firm | ||||||||||||
Wendy P. Davidson Age 53 President and Chief Executive Officer The Hain Celestial Group, Inc., an organic and natural products company | William H. Fenstermaker Age 74 Chairman and CEO, C.H. Fenstermaker and Associates, LLC, a surveying, mapping, engineering, and environmental consulting company | D. Bryan Jordan Age 61 Chairman of the Board, President and Chief Executive Officer, First Horizon Corporation, a financial services company | ||||||||||||
J. Michael Kemp, Sr. Age 52 Founder and Chief Executive Officer, Kemp Management Solutions, a program management and consulting firm | Rick E. Maples Age 64 Retired Co-Head of Investment Banking, Stifel, Nicolaus and Company, Incorporated, a financial services company | Vicki R. Palmer Age 69 President, The Palmer Group, LLC a general consulting firm | ||||||||||||
Colin V. Reed Age 75 Chairman of the Board and Chief Executive Officer, Ryman Hospitality Properties, Inc. a real estate investment trust | E. Stewart Shea, III Age 71 Private Investor | Cecelia D. Stewart Age 64 Retired President, U.S. Consumer & Commercial Banking, Citigroup, Inc. a financial services company | ||||||||||||
Rosa Sugrañes Age 65 Founder and former Chief Executive Officer, Iberia Tiles, a ceramic tile distributor | R. Eugene Taylor Age 75 Retired Chairman of the Board and Chief Executive Officer, Capital Bank Financial Corp., a financial services company |
204 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 11. EXECUTIVE COMPENSATION | ||||||||
205 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 12. SECURITY OWNERSHIP & RELATED STOCKHOLDER MATTERS | ||||||||
A | B | C | |||||||||||||||||||||
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options (1) | Weighted Average Exercise Price of Outstanding Options (1) | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in Col. A) | ||||||||||||||||||||
Equity Compensation Plans Approved by Shareholders (2) | 2,418,040 | (3) | $15.70 | 6,266,253 | |||||||||||||||||||
Equity Compensation Plans Not Approved by Shareholders (4) | 19,406 | (4) | $17.59 | — | (4) | ||||||||||||||||||
Totals for A & C, wtd avg for B | 2,437,446 | $15.72 | 6,266,253 |
206 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 12. SECURITY OWNERSHIP & RELATED STOCKHOLDER MATTERS | ||||||||
207 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 12. SECURITY OWNERSHIP & RELATED STOCKHOLDER MATTERS | ||||||||
208 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 13. CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS AND ITEM 14. PRINCIPAL ACCOUNTANT FEES & SERVICES | ||||||||
209 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES | ||||||||
PART IV |
Item 8 Page | Statement, Note, or Report Incorporated into Item 15 | ||||
Report of Management on Internal Control over Financial Reporting | |||||
Reports of Independent Registered Public Accounting Firm | |||||
Consolidated Balance Sheets as of December 31, 2022 and 2021 | |||||
Consolidated Statements of Income for the years ended December 31, 2022, 2021, and 2020 | |||||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021, and 2020 | |||||
Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021, and 2020 | |||||
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020 | |||||
Notes to the Consolidated Financial Statements |
210 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES | ||||||||
Exh No | Description of Exhibit to this 10-K Report | Filed Here | Mngt Exh | Furn-ished | Incorporated by Reference to | ||||||||||||||||||
Form | Exh No | Filing Date | |||||||||||||||||||||
Corporate Exhibits | |||||||||||||||||||||||
2.1 | 10-K | 2.1 | 3/1/2022 | ||||||||||||||||||||
3.1 | 8-K | 3.1 | 7/30/2021 | ||||||||||||||||||||
3.2 | 8-K | 3.1 | 3/3/2022 | ||||||||||||||||||||
3.3 | 8-K | 3.1 | 1/25/2023 | ||||||||||||||||||||
4.1 | 8-K | 4.1 | 7/2/2020 | ||||||||||||||||||||
4.2 | 8-K | 4.1 | 7/2/2020 | ||||||||||||||||||||
4.3 | 8-K | 4.2 | 7/2/2020 | ||||||||||||||||||||
4.4 | 8-K | 4.2 | 7/2/2020 | ||||||||||||||||||||
4.5 | 8-K | 4.3 | 7/2/2020 | ||||||||||||||||||||
4.6 | 8-K | 4.3 | 7/2/2020 | ||||||||||||||||||||
4.7 | 8-K | 4.1 | 5/28/2020 | ||||||||||||||||||||
4.8 | 8-K | 4.2 | 5/28/2020 | ||||||||||||||||||||
4.9 | 8-K | 4.1 | 5/28/2020 | ||||||||||||||||||||
4.10 | 8-K | 4.1 | 5/03/2021 | ||||||||||||||||||||
4.11 | 8-K | 4.2 | 5/03/2021 | ||||||||||||||||||||
4.12 | 8-K | 4.1 | 5/03/2021 | ||||||||||||||||||||
4.13 | 10-Q 2Q21 | 4.4 | 8/5/2021 | ||||||||||||||||||||
4.14 | FHN agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument defining the rights of the holders of the senior and subordinated long-term debt of FHN and its consolidated subsidiaries | ||||||||||||||||||||||
Equity-Based Award Plans | |||||||||||||||||||||||
10.1 (a) | X | Proxy 2021 | App. A | 3/15/2021 | |||||||||||||||||||
10.1 (b) | X | Proxy 2016 | App. A | 3/14/2016 | |||||||||||||||||||
10.1 (c) | X | 10-K 2020 | 10.1(b) | 2/25/2021 |
211 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES | ||||||||
Exh No | Description of Exhibit to this 10-K Report | Filed Here | Mngt Exh | Furn-ished | Incorporated by Reference to | ||||||||||||||||||
Form | Exh No | Filing Date | |||||||||||||||||||||
10.1 (d) | X | 10-K 2020 | 10.1(c) | 2/25/2021 | |||||||||||||||||||
10.1 (e) | X | 10-K 2020 | 10.1(d) | 2/25/2021 | |||||||||||||||||||
10.1 (f) | X | 10-Q 2Q09 | 10.2(d) | 8/6/2009 | |||||||||||||||||||
10.1 (g) | X | 10-Q 2Q09 | 10.1(e) | 8/6/2009 | |||||||||||||||||||
Performance-Based Equity Award Documents | |||||||||||||||||||||||
10.2 (a) | X | 10-Q 1Q16 | 10.6 | 5/6/2016 | |||||||||||||||||||
10.2 (b) | X | 10-Q 1Q20 | 10.1 | 5/8/2020 | |||||||||||||||||||
10.2 (c) | X | 10-Q 1Q21 | 10.1 | 5/6/2021 | |||||||||||||||||||
10.2 (d) | X | 10-Q 1Q22 | 10.1 | 5/6/2022 | |||||||||||||||||||
10.2 (e) | X | X | |||||||||||||||||||||
Stock Option Award Documents | |||||||||||||||||||||||
10.3 (a) | X | 10-Q 2Q17 | 10.1 | 8/8/2017 | |||||||||||||||||||
10.3 (b) | X | 10-K 2004 | 10.5(e) | 3/14/2005 | |||||||||||||||||||
10.3 (c) | X | 10-K 2006 | 10.5(o) | 2/28/2007 | |||||||||||||||||||
10.3 (d) | X | 10-Q 1Q16 | 10.2 | 5/6/2016 | |||||||||||||||||||
10.3 (e) | X | 10-Q 1Q16 | 10.5 | 5/6/2016 | |||||||||||||||||||
10.3 (f) | X | 10-Q 1Q17 | 10.2 | 5/8/2017 | |||||||||||||||||||
10.3 (g) | X | 10-Q 1Q18 | 10.2 | 5/8/2018 | |||||||||||||||||||
10.3 (h) | X | 10-Q 1Q19 | 10.2 | 5/8/2019 | |||||||||||||||||||
10.3 (i) | X | 10-Q 1Q20 | 10.2 | 5/8/2020 | |||||||||||||||||||
10.3 (j) | X | 10-K 2020 | 10.3(l) | 2/25/2021 | |||||||||||||||||||
Other Equity-Based Award Documents | |||||||||||||||||||||||
10.4 (a) | X | 10-Q 1Q20 | 10.3 | 5/8/2020 | |||||||||||||||||||
10.4 (b) | X | 10-Q 1Q21 | 10.2 | 5/6/2021 | |||||||||||||||||||
10.4 (c) | X | 10-Q 1Q21 | 10.3 | 5/6/2021 | |||||||||||||||||||
10.4 (d) | X | 10-Q 1Q22 | 10.2 | 5/6/2022 | |||||||||||||||||||
10.4 (e) | X | X | |||||||||||||||||||||
10.4 (f) | X | 10-Q 2Q22 | 10.1 | 8/4/2022 |
212 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES | ||||||||
Exh No | Description of Exhibit to this 10-K Report | Filed Here | Mngt Exh | Furn-ished | Incorporated by Reference to | ||||||||||||||||||
Form | Exh No | Filing Date | |||||||||||||||||||||
10.4 (g) | X | X | |||||||||||||||||||||
10.4 (h) | X | 10-K 2020 | 10.4(f) | 2/25/2021 | |||||||||||||||||||
10.4 (i) | X | 10-Q 1Q21 | 10.4 | 5/6/2021 | |||||||||||||||||||
Management Cash Incentive Plan Documents | |||||||||||||||||||||||
10.5 (a) | X | 8-K | 10.1 | 10/27/2021 | |||||||||||||||||||
Other Exhibits relating to Employment, Retirement, Severance, or Separation | |||||||||||||||||||||||
10.6 (a) | X | 8-K | 10.7(a2) | 2/26/2007 | |||||||||||||||||||
10.6 (b) | X | 10-Q 3Q07 | 10.7(a4) | 11/7/2007 | |||||||||||||||||||
10.6 (c) | X | 10-Q 3Q07 | 10.7(a5) | 11/7/2007 | |||||||||||||||||||
10.6 (d) | X | 8-K | 10.2 | 11/24/2008 | |||||||||||||||||||
10.6 (e) | X | 8-K | 10.1 | 1/29/2021 | |||||||||||||||||||
10.6 (f) | X | 10-Q 3Q07 | 10.7(e) | 11/7/2007 | |||||||||||||||||||
10.6 (g) | X | 10-K 2009 | 10.7(d2) | 2/26/2010 | |||||||||||||||||||
10.6 (h) | X | 10-Q 3Q11 | 10.2 | 11/8/2011 | |||||||||||||||||||
10.6 (i) | X | 8-K | 10.1 | 7/17/2012 | |||||||||||||||||||
10.6 (j) | X | 8-K | 10.1 | 11/7/2019 | |||||||||||||||||||
10.6 (k) | X | 8-K | 10.2 | 11/7/2019 | |||||||||||||||||||
10.6 (l) | X | 10-K 2020 | 10.6(l) | 2/25/2021 | |||||||||||||||||||
10.6 (m) | X | 10-K 2020 | 10.6(m) | 2/25/2021 | |||||||||||||||||||
10.6 (n) | X | 8-K | 99.1 | 11/7/2019 | |||||||||||||||||||
10.6 (o) | X | 10-K 2020 | 10.6(o) | 2/25/2021 | |||||||||||||||||||
10.6 (p) | X | 8-K | 10.1 | 7/2/2020 | |||||||||||||||||||
10.6 (q) | X | 8-K | 10.1 | 11/9/2021 | |||||||||||||||||||
Documents Related to Other Deferral Plans and Programs | |||||||||||||||||||||||
10.7 (a) | X | 10-Q 2Q17 | 10.4 | 8/8/2017 | |||||||||||||||||||
10.7 (b) | X | 10-Q 3Q07 | 10.1(a3) | 11/7/2007 | |||||||||||||||||||
10.7 (c) | X | 10-Q 3Q22 | 10.1 | 11/7/2022 | |||||||||||||||||||
10.7 (d) | X | 10-K 2018 | 10.7(d) | 2/28/2019 |
213 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES | ||||||||
Exh No | Description of Exhibit to this 10-K Report | Filed Here | Mngt Exh | Furn-ished | Incorporated by Reference to | ||||||||||||||||||
Form | Exh No | Filing Date | |||||||||||||||||||||
10.7 (e) | X | 10-Q 3Q07 | 10.1(c) | 11/7/2007 | |||||||||||||||||||
10.7 (f) | X | 8-K | 10(z) | 1/3/2005 | |||||||||||||||||||
Other Exhibits related to Management or Directors | |||||||||||||||||||||||
10.8 (a) | X | 10-Q 3Q06 | 10.8 | 11/8/2006 | |||||||||||||||||||
10.8 (b) | X | 10-K 2020 | 10.8(b) | 2/25/2021 | |||||||||||||||||||
10.8 (c) | X | 10-Q 2Q17 | 10.2 | 8/8/2017 | |||||||||||||||||||
10.8 (d) | X | 10-Q 2Q17 | 10.3 | 8/8/2017 | |||||||||||||||||||
10.8 (e) | X | 8-K | 10.4 | 4/28/2008 | |||||||||||||||||||
10.8 (f) | X | 8-K | 10.5 | 4/28/2008 | |||||||||||||||||||
10.8 (g) | X | X | |||||||||||||||||||||
10.8 (h) | X | X | |||||||||||||||||||||
Other Exhibits | |||||||||||||||||||||||
14 | X | ||||||||||||||||||||||
21 | X | ||||||||||||||||||||||
23 | X | ||||||||||||||||||||||
24 | X | ||||||||||||||||||||||
31(a) | X | ||||||||||||||||||||||
31(b) | X | ||||||||||||||||||||||
32(a) | X | X | |||||||||||||||||||||
32(b) | X | X | |||||||||||||||||||||
XBRL Exhibits | |||||||||||||||||||||||
101 | The following financial information from First Horizon Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets at December 31, 2022 and 2021 (ii) Consolidated Statements of Income for the Years Ended December 31, 2022, 2021, and 2020 (iii) Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020. (iv) Consolidated Statements of Changes in Equity for the Years Ended December 31, 2022, 2021, and 2020. (v) Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020. (vi) Notes to the Consolidated Financial Statements | X |
214 | 2022 FORM 10-K ANNUAL REPORT |
ITEM 15. EXHIBITS & FINANCIAL STATEMENT SCHEDULES | ||||||||
Exh No | Description of Exhibit to this 10-K Report | Filed Here | Mngt Exh | Furn-ished | Incorporated by Reference to | ||||||||||||||||||
Form | Exh No | Filing Date | |||||||||||||||||||||
101. INS | XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | X | |||||||||||||||||||||
101. SCH | Inline XBRL Taxonomy Extension Schema | X | |||||||||||||||||||||
101. CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | X | |||||||||||||||||||||
101. DEF | Inline XBRL Taxonomy Extension Definition Linkbase | X | |||||||||||||||||||||
101. LAB | Inline XBRL Taxonomy Extension Label Linkbase | X | |||||||||||||||||||||
101. PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | X | |||||||||||||||||||||
104 | Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101) | X |
215 | 2022 FORM 10-K ANNUAL REPORT |
SIGNATURES | ||||||||
FIRST HORIZON CORPORATION | ||||||||||||||
Date: March 1, 2023 | By: | /s/ Hope Dmuchowski | ||||||||||||
Name: | Hope Dmuchowski | |||||||||||||
Title: | Senior Executive Vice President and Chief Financial Officer | |||||||||||||
(Duly Authorized Officer and Principal Financial Officer) |
Signature* | Title | Date* | Signature* | Title | Date* | |||||||||||||||
D. Bryan Jordan D. Bryan Jordan | President, Chief Executive Officer, Chairman of the Board, and a Director (principal executive officer) | * | Hope Dmuchowski Hope Dmuchowski | Senior Executive Vice President and Chief Financial Officer (principal financial officer) | * | |||||||||||||||
Jeff L. Fleming Jeff L. Fleming | Executive Vice President and Chief Accounting Officer (principal accounting officer) | * | Harry V. Barton, Jr. Harry V. Barton, Jr. | Director | * | |||||||||||||||
John N. Casbon John N. Casbon | Director | * | John C. Compton John C. Compton | Director | * | |||||||||||||||
Wendy P. Davidson Wendy P. Davidson | Director | * | William H. Fenstermaker William H. Fenstermaker | Director | * | |||||||||||||||
J. Michael Kemp, Sr. J. Michael Kemp, Sr. | Director | * | Rick E. Maples Rick E. Maples | Director | * | |||||||||||||||
Vicki R. Palmer Vicki R. Palmer | Director | * | Colin V. Reed Colin V. Reed | Director | * | |||||||||||||||
E. Stewart Shea III E. Stewart Shea III | Director | * | Cecelia D. Stewart Cecelia D. Stewart | Director | * | |||||||||||||||
Rosa Sugrañes Rosa Sugrañes | Director | * | R. Eugene Taylor R. Eugene Taylor | Director | * |
*By: /s/ Clyde A. Billings, Jr. | March 1, 2023 | |||||||||||||
Clyde A. Billings, Jr. | ||||||||||||||
As Attorney-in-Fact |
216 | 2022 FORM 10-K ANNUAL REPORT |
GRANT NOTICE | ||
Performance Stock Units—ROTCE/TSR Rank |
Grant Date: | __________ __, 2023 | Governing Plan: | 2021 Incentive Plan | ||||||||
Target Number of PSUs Granted: | ROTCE Performance Period: | Three-year period 2023 thru 2025 | |||||||||
Vesting Date: | May 12, 2026 | TSR Start Date: | March 15, 2023 | ||||||||
TSR End Date: | March 15, 2026 |
1 | 2023 GRANT NOTICE EXECUTIVE PSUs |
2 | 2023 GRANT NOTICE EXECUTIVE PSUs |
3 | 2023 GRANT NOTICE EXECUTIVE PSUs |
4 | 2023 GRANT NOTICE EXECUTIVE PSUs |
GRANT NOTICE | ||
Executive RSUs |
Amount of Award: | ______ Restricted Stock Units | Grant Date: | _________ ___, 2023 | ||||||||
Governing Plan: | 2021 Incentive Plan | Vesting Date: | March 2, 2026 |
1 | 2023 GRANT NOTICE EXECUTIVE RSUs |
2 | 2023 GRANT NOTICE EXECUTIVE RSUs |
GRANT NOTICE | ||
Restricted Cash Units (TD Merger Program) |
Amount of Award: | ______ RCUs ($1 per Unit) | Grant Date: | _________ ___, 2023 | ||||||||
Governing Plan: | 2021 Incentive Plan | Vesting Date: | [2nd anniv of grant] |
1 | 2023 GRANT NOTICE TD MERGER RCUs |
2 | 2023 GRANT NOTICE TD MERGER RCUs |
EXHIBIT 10.8(g) | ||||||||
Certain Executive Benefits |
1 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 10.8(h) | ||||||||
NEO Salaries 2023 |
Officer Name | 2023 Salary Rate | |||||||
D. Bryan Jordan | 1,060,900 | |||||||
Hope Dmuchowski | 600,000 | |||||||
Anthony J. Restel | 700,000 | |||||||
David T. Popwell | 700,000 | |||||||
Tammy S. LoCascio | 650,000 |
1 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 14 | ||||||||
Code of Ethics Sr Fin Offs |
1 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 14 | ||||||||
Code of Ethics Sr Fin Offs |
2 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 21 | ||||||||
Subsidiaries |
Entity | Type of Ownership | Jurisdiction of Incorporation or Organization | ||||||
First Horizon Bank (1) (Bank subsidiaries are scheduled separately) | Direct | Tennessee | ||||||
CB Trustee, LLC | Direct | North Carolina | ||||||
First Horizon Community Development Fund, LLC | Direct | Tennessee | ||||||
First Horizon Ventures, Inc. | Direct | Tennessee | ||||||
IBERIA Asset Management Inc. | Direct | Louisiana | ||||||
IBERIA CDE, LLC | Direct | Louisiana | ||||||
LIBERTY BANCORP DENNING, LLC | Direct | Florida | ||||||
840 Denning LLC | Indirect | Florida | ||||||
Martin & Company, Inc. | Direct | Tennessee |
Subsidiary of the Bank | Type of Ownership by the Bank | Jurisdiction of Incorporation or Organization | ||||||
Acadiana Holdings, LLC | Direct | Louisiana | ||||||
C1 Trustee, Inc. | Direct | North Carolina | ||||||
Capital Financial Leasing, LLC | Direct | Delaware | ||||||
FHIS, Inc. FS | Direct | Tennessee | ||||||
FHN Financial Main Street Advisors, LLC | Direct | Nevada | ||||||
FHN Financial Capital Assets Corp. | Direct | Tennessee | ||||||
FHN Financial Securities Corp. FS | Direct | Tennessee | ||||||
First Horizon Advisors, Inc. FS | Direct | Tennessee | ||||||
First Horizon Asset Securities, Inc. | Direct | Delaware | ||||||
First Horizon CDE 1, LLC | Direct | Tennessee | ||||||
First Horizon CDE 2, LLC | Direct | Tennessee | ||||||
First Horizon CDE 3, LLC | Direct | Tennessee | ||||||
First Horizon Community Development Enterprises, LLC | Direct | Tennessee |
1 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 21 | ||||||||
Subsidiaries |
Subsidiary of the Bank | Type of Ownership by the Bank | Jurisdiction of Incorporation or Organization | ||||||
First Horizon Community Investment Group, Inc. | Direct | Tennessee | ||||||
CC Community Development Holdings, Inc. | Indirect | Tennessee | ||||||
FHCIG Second Harvest Investment Fund, LLC | Indirect | Tennessee | ||||||
FHCIG Our House Investment Fund, LLC | Indirect | Tennessee | ||||||
First Horizon Insurance Agency, Inc FS | Direct | Georgia | ||||||
First Horizon Insurance Services, Inc FS | Direct | Tennessee | ||||||
First Tennessee New Markets Corporation | Direct | Tennessee | ||||||
FT Building, LLC | Direct | Tennessee | ||||||
FT Leasing, Inc. | Direct | Tennessee | ||||||
FTB QOF I, Inc. | Direct | Tennessee | ||||||
FTB QOF II, Inc. | Direct | Tennessee | ||||||
FTB QOF III, Inc. | Direct | Tennessee | ||||||
FTB QOF IV, Inc. | Direct | Tennessee | ||||||
FTRE Holding, LLC | Direct | Delaware | ||||||
First Horizon TE1, LLC | Indirect | Delaware | ||||||
First Horizon Preferred Funding, Inc. | Indirect | Delaware | ||||||
First Horizon Preferred Funding II, Inc. | Indirect | Delaware | ||||||
First Horizon Preferred Funding III, Inc. | Indirect | Delaware | ||||||
First Horizon Preferred Funding IV, Inc. | Indirect | Maryland | ||||||
FTB Securities Investment II, LLC | Indirect | Delaware | ||||||
FT Real Estate Securities Company, Inc. | Indirect | Delaware | ||||||
IB SPE Management, Inc. | Direct | Delaware | ||||||
IBERIA Civic Impact Partners LLC | Direct | Louisiana | ||||||
IBERIA Collage Impact Fund, LLC | Indirect | Louisiana | ||||||
IBERIA NOCHI Impact Fund I, LLC | Indirect | Louisiana | ||||||
IBERIA NOCHI Impact Fund II, LLC | Indirect | Louisiana | ||||||
IBERIA Plush Mill Impact Fund, LLC | Indirect | Louisiana | ||||||
IBERIA VCOM Impact Fund, LLC | Indirect | Louisiana | ||||||
Iberia Corporate Asset Finance, LLC | Direct | Alabama | ||||||
Iberia Financial Services, LLC | Direct | Louisiana | ||||||
IBERIA INVESTMENT FUND I, LLC | Direct | Louisiana | ||||||
IBERIA CommCare Impact Fund LLC | Indirect | Louisiana | ||||||
JPO, Inc. | Direct | Tennessee | ||||||
Mercantile Capital Corporation | Direct | Florida |
2 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 21 | ||||||||
Subsidiaries |
Name | Jurisdiction of Incorporation or Organization | ||||
Capital Bank Statutory Trust III | Connecticut | ||||
Civitas Statutory Trust I | Delaware | ||||
FNB United Statutory Trust I | Connecticut | ||||
FNB United Statutory Trust II | Delaware | ||||
GreenBank Capital Trust I | Delaware | ||||
Greene County Capital Trust II | Delaware | ||||
Southern Community Capital Trust III | Delaware | ||||
TIBFL Statutory Trust III | Delaware |
3 | 2022 FORM 10-K ANNUAL REPORT |
SIGNATURE | TITLE | DATE | ||||||
/s/ D. Bryan Jordan | Chairman of the Board, President, and Chief Executive Officer and Director (principal executive officer) | February 28, 2023 | ||||||
D. Bryan Jordan | ||||||||
/s/ Hope Dmuchowski | Senior Executive Vice President and Chief Financial Officer (principal financial officer) | February 28, 2023 | ||||||
Hope Dmuchowski | ||||||||
/s/ Jeff L. Fleming | Executive Vice President and Chief Accounting Officer (principal accounting officer) | February 28, 2023 | ||||||
Jeff L. Fleming | ||||||||
/s/ Harry V. Barton, Jr. | Director | February 28, 2023 | ||||||
Harry V. Barton, Jr. | ||||||||
/s/ John N. Casbon | Director | February 28, 2023 | ||||||
John N. Casbon | ||||||||
/s/ John C. Compton | Director | February 28, 2023 | ||||||
John C. Compton | ||||||||
/s/ Wendy P. Davidson | Director | February 28, 2023 | ||||||
Wendy P. Davidson | ||||||||
/s/ William H. Fenstermaker | Director | February 28, 2023 | ||||||
William H. Fenstermaker | ||||||||
/s/ J. Michael Kemp, Sr. | Director | February 28, 2023 | ||||||
J. Michael Kemp, Sr. |
1 | 2022 FORM 10-K ANNUAL REPORT |
EXHIBIT 24 | ||||||||
Power of Attorney |
SIGNATURE | TITLE | DATE | ||||||
/s/ Rick E. Maples | Director | February 28, 2023 | ||||||
Rick E. Maples | ||||||||
/s/ Vicki R. Palmer | Director | February 28, 2023 | ||||||
Vicki R. Palmer | ||||||||
/s/ Colin V. Reed | Director | February 28, 2023 | ||||||
Colin V. Reed | ||||||||
/s/ E. Stewart Shea, III | Director | February 28, 2023 | ||||||
E. Stewart Shea, III | ||||||||
/s/ Cecelia D. Stewart | Director | February 28, 2023 | ||||||
Cecelia D. Stewart | ||||||||
/s/ Rosa Sugrañes | Director | February 28, 2023 | ||||||
Rosa Sugrañes | ||||||||
/s/ R. Eugene Taylor | Director | February 28, 2023 | ||||||
R. Eugene Taylor |
2 | 2022 FORM 10-K ANNUAL REPORT |