EX-99.2 4 c95405_ex99-2.htm

Exhibit 99.2

 

Selected Information Derived from First Horizon National Corporation’s First Quarter
2020 Financial Supplement

 

FHN CONSOLIDATED INCOME STATEMENT

Quarterly, Unaudited

 

                                                     
                              1Q20 Changes vs.
(Dollars in thousands, except per share data) 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
Interest income $ 378,368     $ 404,142     $ 407,494     $ 412,089     $ 400,615     (6 ) % (6 ) %
Less: interest expense 75,566     92,749     106,818     108,479     106,107     (19 ) % (29 ) %
Net interest income 302,802     311,393     300,676     303,610     294,508     (3 ) % 3   %
Provision/(provision credit) for loan losses (a) 145,000     10,000     15,000     13,000     9,000     NM     NM    
Net interest income after provision for loan losses 157,802     301,393     285,676     290,610     285,508     (48 ) % (45 ) %
Noninterest income:                                          
Fixed income (b) 95,635     80,981     77,645     66,414     53,749     18   % 78   %
Deposit transactions and cash management 30,290     33,289     34,379     32,374     31,621     (9 ) % (4 ) %
Brokerage, management fees and commissions 15,405     14,557     14,157     14,120     12,633     6   % 22   %
Trust services and investment management 7,195     7,434     7,163     7,888     7,026     (3 ) % 2   %
Bankcard income 7,253     7,984     7,017     6,355     6,952     (9 ) % 4   %
Bank-owned life insurance 4,589     5,255     4,427     5,126     4,402     (13 ) % 4   %
Securities gains/(losses), net 25     (3 )   97     49     31     NM     (19 ) %
Other (c) 14,364     33,810     26,850     25,667     24,631     (58 ) % (42 ) %
Total noninterest income 174,756     183,307     171,735     157,993     141,045     (5 ) % 24   %
Adjusted gross income after provision for loan losses 332,558     484,700     457,411     448,603     426,553     (31 ) % (22 ) %
Noninterest expense:                                          
Employee compensation, incentives, and benefits (d) (e) 183,470     178,761     167,022     171,643     177,925     3   % 3   %
Legal fees (e) 1,823     2,709     4,854     6,486     2,831     (33 ) % (36 ) %
Professional fees (e) 6,996     16,718     14,910     11,291     12,299     (58 ) % (43 ) %
Occupancy (e) 19,563     19,972     18,887     20,719     20,693     (2 ) % (5 ) %
Computer software 16,027     15,390     15,191     15,001     15,139     4   % 6   %
Contract employment and outsourcing 4,936     3,160     3,256     3,078     3,371     56   % 46   %
Operations services 11,692     11,171     11,634     11,713     11,488     5   % 2   %
Equipment rentals, depreciation, and maintenance 8,552     8,597     8,197     8,375     8,829     (1 ) % (3 ) %
FDIC premium expense 6,742     5,806     5,564     4,247     4,273     16   % 58   %
Advertising and public relations (e) 7,456     14,897     6,646     5,574     7,242     (50 ) % 3   %
Communications and courier 5,528     5,597     5,650     7,380     6,453     (1 ) % (14 ) %
Amortization of intangible assets 5,308     6,206     6,206     6,206     6,216     (14 ) % (15 ) %
Other (c) 33,226     38,463     39,655     28,681     19,331     (14 ) % 72   %
Total noninterest expense 311,319     327,447     307,672     300,394     296,090     (5 ) % 5   %
Income before income taxes 21,239     157,253     149,739     148,209     130,463     (86 ) % (84 ) %
Provision for income taxes 4,767     35,970     35,796     34,467     27,058     (87 ) % (82 ) %
Net income/(loss) 16,472     121,283     113,943     113,742     103,405     (86 ) % (84 ) %
Net income attributable to noncontrolling interest 2,852     2,910     2,883     2,852     2,820     (2 ) % 1   %
Net income/(loss) attributable to controlling interest 13,620     118,373     111,060     110,890     100,585     (88 ) % (86 ) %
Preferred stock dividends 1,550     1,550     1,550     1,550     1,550     *     *    
Net income/(loss) available to common shareholders $ 12,070     $ 116,823     $ 109,510     $ 109,340     $ 99,035     (90 ) % (88 ) %
Common Stock Data                                          
EPS $ 0.04     $ 0.38     $ 0.35     $ 0.35     $ 0.31     (89 ) % (87 ) %
Basic shares (thousands) 311,597     311,250     311,888     314,063     317,435     *     (2 ) %
Diluted EPS $ 0.04     $ 0.37     $ 0.35     $ 0.35     $ 0.31     (89 ) % (87 ) %
Diluted shares (thousands) 313,170     313,353     313,805     315,786     319,581     *     (2 ) %
Key Ratios & Other                                      
Return on average assets (annualized) (f) 0.15 %   1.12 %   1.08 %   1.11 %   1.03 %              
Return on average common equity (“ROCE”) (annualized) (f) 1.05 %   9.97 %   9.50 %   9.79 %   9.09 %              
Fee income to total revenue (f) 36.59 %   37.05 %   36.34 %   34.22 %   32.38 %              
Efficiency ratio (f) 65.19 %   66.19 %   65.14 %   65.08 %   67.99 %              
Average full time equivalent employees 4,969     5,005     5,116     5,287     5,524                

NM - Not meaningful

* Amount is less than one percent.

(a) 1Q20 increase in provision expense primarily associated with a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.
(b) 2Q19 includes $1.1 million of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.
(c) Refer to the Other Income and Other Expense table on page for additional information.
(d) 1Q20 and 4Q19 include $(10.3) million and $3.9 million, respectively, of deferred compensation expense.
(e) Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 3 for additional information about variability in quarterly balances.
(f) See Glossary of Terms for definitions of Key Ratios.
1

FHN OTHER INCOME AND OTHER EXPENSE

Quarterly, Unaudited

 

                        1Q20 Changes vs.
(Thousands)   1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                               
Other Income                                          
ATM and interchange fees   $ 4,212     $ 4,529     $ 4,507     $ 4,262     $ 3,241     (7 ) % 30   %
Dividend income   1,130     1,508     1,556     1,809     2,313     (25 ) % (51 ) %
Electronic banking fees   1,030     1,101     1,288     1,267     1,271     (6 ) % (19 ) %
Letter of credit fees   1,462     1,561     1,400     1,253     1,368     (6 ) % 7   %
Mortgage banking   2,431     3,578     2,019     2,572     1,886     (32 ) % 29   %
Deferred compensation (a)   (9,507 )   3,339     472     1,938     5,474     NM     NM    
Insurance commissions   789     358     577     566     624     NM     26   %
Other service charges   5,219     5,755     5,738     5,624     3,869     (9 ) % 35   %
Gain/(loss) on extinguishment of debt   -     65     (6 )   -     (1 )   NM     NM    
Other (b)   7,598     12,016     9,299     6,376     4,586     (37 ) % 66   %
Total   $ 14,364     $ 33,810     $ 26,850     $ 25,667     $ 24,631     (58 ) % (42 ) %
                                   
Other Expense                                          
Litigation and regulatory matters   $ 13     $ (394 )   $ 11,534     $ (8,230 )   $ 13     NM     *    
Tax credit investments   346     460     407     267     675     (25 ) % (49 ) %
Travel and entertainment   2,709     3,652     2,849     2,906     2,712     (26 ) % *    
Employee training and dues   1,341     1,430     1,003     1,251     1,457     (6 ) % (8 ) %
Customer relations (c)   2,004     2,794     3,165     1,540     1,599     (28 ) % 25   %
Miscellaneous loan costs   1,094     1,227     1,017     857     1,027     (11 ) % 7   %
Supplies   2,411     2,104     1,668     1,342     1,804     15   % 34   %
OREO   (184 )   1,478     342     25     (366 )   NM     50   %
Other insurance and taxes   2,679     2,515     2,475     2,495     2,694     7   % (1 ) %
Non-service components of net periodic pension and post retirement cost   2,508     327     986     559     432     NM     NM    
Expense/(Credit) on unfunded commitments (d)   9,230     (790 )   (634 )   (489 )   396     NM     NM    
Other (e)   9,075     23,660     14,843     26,158     6,888     (62 ) % 32   %
Total   $ 33,226     $ 38,463     $ 39,655     $ 28,681     $ 19,331     (14 ) % 72   %

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

NM - Not meaningful

* Amount is less than one percent.

(a) Amounts driven by market conditions and are mirrored by changes in deferred compensation expense which is included in employee compensation expense; 1Q20 decrease driven by equity market valuations.
(b) Increase beginning in 2Q19 due in large part to higher fees from derivative sales; 4Q19 and 3Q19 include an increase in collections from CBF loans charged off prior to acquisition, under ASU 2016-13 (CECL) these collections are no longer recognized as part of fee income, but are accounted for as reductions of provision; 3Q19 includes $1.0 million of gains on the sales of buildings.
(c) 3Q19 increase driven by higher business development costs.
(d) 1Q20 increase largely associated with a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.
(e) 4Q19 includes $11.0 million of charitable contributions; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares; Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 3 for additional information about variability in quarterly balances.
2

ACQUISITION EXPENSE

Quarterly, Unaudited

 

          1Q20 Changes vs.
IBKC ACQUISITION EXPENSE 1Q20     4Q19     4Q19
               
(Thousands)            
Legal and professional fees (a) $ 662     $ 8,228     (92 ) %
Employee compensation, incentives, and benefits (b) 689     3,079     (78 ) %
Miscellaneous expense (e) 254     64     NM    
Total IBKC acquisition expense $ 1,605     $ 11,371     (86 ) %
                       
                        1Q20 Changes vs.
OTHER ACQUISITION EXPENSE 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
(Thousands)                                    
Legal and professional fees (a) $ 799     $ 1,494     $ 3,507     $ 4,478     $ 1,867     (47 ) % (57 ) %
Employee compensation, incentives, and benefits (b) 396     1,035     1,473     1,472     1,517     (62 ) % (74 ) %
Occupancy (c) (25 )   (94 )   (76 )   1,505     118     73   % NM    
Contract employment and outsourcing (d) 306     35     223     17     -     NM     NM    
Miscellaneous expense (e) 822     217     1,022     79     1,069     NM     (23 ) %
All other expense (f) 1,874     1,638     2,840     1,096     1,089     14   % 72   %
Total other acquisition expense $ 4,172     $ 4,325     $ 8,989     $ 8,647     $ 5,660     (4 ) % (26 ) %

NM - Not meaningful

(a) Primarily comprised of fees for legal, accounting, and merger consultants.
(b) Primarily comprised of fees for severance and retention.
(c) Primarily relates to fees associated with lease exit accruals.
(d) Primarily relates to fees for temporary assistance for merger and integration activities.
(e) Consists of fees for operations services, communications and courier, equipment rentals, deprecation and maintenance, supplies, travel and entertainment, computer software, and advertising and public relations.
(f) Primarily relates to contract termination charges, internal technology development costs, costs of shareholder matters and asset impairments, as well as other miscellaneous expenses.

 

RESTRUCTURING EXPENSE

Quarterly, Unaudited

 

                      1Q20 Changes vs.
  1Q20     4Q19     3Q19     2Q19   1Q19   4Q19 1Q19
                             
(Thousands)                              
Legal and professional fees $ 7     $ 989     $ 6,488     $4,242   $4,295   (99 ) % NM    
Employee compensation, incentives, and benefits 57     259     1,182     2,557   6,505   (78 ) % (99 ) %
Occupancy 2     57     (128 )   72   817   (96 ) % NM    
All other expense (a) (103 )   (148 )   300     11,797   535   30   % NM    
Total restructuring expense $ (37 )   $ 1,157     $ 7,842     $18,668   $12,152   NM     NM    

NM - Not meaningful

(a) Primarily relates to costs associated with asset impairments.

 

REBRANDING EXPENSE

Quarterly, Unaudited

 

                  1Q20 Changes vs.
  1Q20     4Q19     3Q19     2Q19     4Q19
                     
(Thousands)                    
Legal and professional fees $ 265     $ 1,016     $ 879     $ 882     (74 ) %
Advertising and public relations 116     6,360     663     423     (98 ) %
Supplies 53     862     105     325     (94 ) %
Miscellaneous expense 92     315     145     38     (71 ) %
All other expense (a) 5     561     1,322     7,406     (99 ) %
Total rebranding expense $ 531     $ 9,114     $ 3,114     $ 9,074     (94 ) %
(a) Primarily relates to costs associated with fixed asset impairments and technology-related expenses.
3

FHN CONSOLIDATED PERIOD-END BALANCE SHEET

Quarterly, Unaudited

 

                      1Q20 Changes vs.
(Thousands) 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
Assets:                                        
Investment securities $ 4,554,907     $ 4,455,403     $ 4,425,845     $ 4,425,609     $ 4,626,322     2   % (2 ) %
Loans held-for-sale (a) 595,601     593,790     554,843     447,106     594,662     *     *    
Loans, net of unearned income 33,378,303     31,061,111     31,260,833     29,712,810     27,990,048     7   % 19   %
Federal funds sold 30,050     46,536     48,747     50,705     167,602     (35 ) % (82 ) %
Securities purchased under agreements to resell 562,435     586,629     697,214     602,919     474,679     (4 ) % 18   %
Interest-bearing cash (b) 670,525     482,405     364,412     593,180     1,013,254     39   % (34 ) %
Trading securities 1,877,514     1,346,207     1,395,043     1,668,942     1,681,727     39   % 12   %
Total earning assets 41,669,335     38,572,081     38,746,937     37,501,271     36,548,294     8   % 14   %
Cash and due from banks 537,564     633,728     749,719     596,081     570,589     (15 ) % (6 ) %
Fixed income receivables (c) 180,569     40,114     209,732     147,574     46,782     NM     NM    
Goodwill 1,432,787     1,432,787     1,432,787     1,432,787     1,432,787     *     *    
Other intangible assets, net 124,892     130,200     136,406     142,612     148,818     (4 ) % (16 ) %
Premises and equipment, net 447,812     455,006     451,600     454,271     484,494     (2 ) % (8 ) %
Other real estate owned (“OREO”) 15,837     17,838     20,181     19,286     23,396     (11 ) % (32 ) %
Allowance for loan losses (d) (444,490 )   (200,307 )   (193,149 )   (192,749 )   (184,911 )   NM     NM    
Derivative assets 696,250     183,115     250,786     185,521     118,128     NM     NM    
Other assets 2,536,822     2,046,338     1,912,685     1,885,116     1,910,626     24   % 33   %
Total assets $ 47,197,378     $ 43,310,900     $ 43,717,684     $ 42,171,770     $ 41,099,003     9   % 15   %
                                 
Liabilities and Equity:                                        
Deposits:                                        
Consumer interest $ 13,813,999     $ 13,866,920     $ 13,670,204     $ 13,705,969     $ 13,707,310     *     1   %
Commercial interest 5,867,755     6,153,075     6,211,539     6,660,056     6,729,999     (5 ) % (13 ) %
Market-indexed (e) 5,798,088     3,980,589     3,794,105     3,855,545     4,062,531     46   % 43   %
Total interest-bearing deposits 25,479,842     24,000,584     23,675,848     24,221,570     24,499,840     6   % 4   %
Noninterest-bearing deposits 8,939,808     8,428,951     8,268,812     8,086,748     7,963,048     6   % 12   %
Total deposits 34,419,650     32,429,535     31,944,660     32,308,318     32,462,888     6   % 6   %
Federal funds purchased 476,013     548,344     936,837     666,007     339,360     (13 ) % 40   %
Securities sold under agreements to repurchase 788,595     716,925     735,226     764,308     745,788     10   % 6   %
Trading liabilities 452,611     505,581     719,777     558,347     429,669     (10 ) % 5   %
Other short-term borrowings (f) 4,060,673     2,253,045     2,276,139     865,347     140,832     80   % NM    
Term borrowings (g) 792,751     791,368     1,195,096     1,186,646     1,177,926     *     (33 ) %
Fixed income payables (c) 91,274     49,535     66,842     66,369     100,290     84   % (9 ) %
Derivative liabilities 234,984     67,480     83,530     88,485     107,123     NM     NM    
Other liabilities 825,247     873,079     763,534     741,862     748,606     (5 ) % 10   %
Total liabilities 42,141,798     38,234,892     38,721,641     37,245,689     36,252,482     10   % 16   %
Equity:                                        
Common stock 194,914     194,668     194,487     195,299     197,101     *     (1 ) %
Capital surplus 2,938,670     2,931,451     2,925,309     2,941,696     2,983,948     *     (2 ) %
Undivided profits (h) 1,667,105     1,798,442     1,725,846     1,660,520     1,595,568     (7 ) % 4   %
Accumulated other comprehensive loss, net (136,164 )   (239,608 )   (240,654 )   (262,489 )   (321,151 )   (43 ) % (58 ) %
Preferred stock 95,624     95,624     95,624     95,624     95,624     *     *    
Noncontrolling interest (i) 295,431     295,431     295,431     295,431     295,431     *     *    
Total equity 5,055,580     5,076,008     4,996,043     4,926,081     4,846,521     *     4   %
Total liabilities and equity $ 47,197,378     $ 43,310,900     $ 43,717,684     $ 42,171,770     $ 41,099,003     9   % 15   %

NM - Not meaningful

*Amount is less than one percent.

(a) 1Q20 includes $494.8 million of SBA and USDA loans, $95.9 million of mortgage loans, and $4.9 million of other consumer loans.
(b) Includes excess balances held at Fed.
(c) Period-end balances fluctuate based on the level of pending unsettled trades.
(d) Effective 1/1/2020 FHN adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” (CECL) which resulted in an increase to the allowance for loan losses of $103.4 million; the remaining 1Q20 increase reflects increased reserves established in 1Q20 associated with a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.
(e) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits; 1Q20 increase used to support commercial loan growth, including loans to mortgage companies.
(f) Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels; 1Q20 increase used to support commercial loan growth, including loans to mortgage companies.
(g) In 4Q19 $400 million of First Horizon Bank senior capital notes matured.
(h) Effective 1/1/2020 FHN adopted ASU 2016-13 (CECL) which resulted in a net decrease to undivided profits of $96.1 million.
(i) Consists of preferred stock of subsidiaries.
4

FHN CONSOLIDATED AVERAGE BALANCE SHEET

Quarterly, Unaudited

 

                                                     
                      1Q20 Changes vs.
(Thousands) 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
Assets:                                        
Earning assets:                                        
Loans, net of unearned income:                                        
Commercial, financial, and industrial (C&I) (a) $ 19,469,572     $ 19,739,937     $ 18,965,829     $ 17,952,866     $ 16,428,088     (1 ) % 19   %
Commercial real estate (a) 4,421,913     4,263,597     4,269,425     3,910,466     3,959,592     4   % 12   %
Consumer real estate (b) 6,134,390     6,194,134     6,283,488     6,310,039     6,410,184     (1 ) % (4 ) %
Credit card and other 498,290     508,651     497,646     498,790     515,436     (2 ) % (3 ) %
Total loans, net of unearned income (c) 30,524,165     30,706,319     30,016,388     28,672,161     27,313,300     (1 ) % 12   %
Loans held-for-sale (d) 590,458     581,810     455,239     606,685     670,401     1   % (12 ) %
Investment securities:                                          
U.S. treasuries 100     100     100     99     99     *     1   %
U.S. government agencies 4,330,905     4,327,651     4,289,719     4,461,712     4,494,814     *     (4 ) %
States and municipalities 64,668     54,146     49,025     41,911     33,400     19   % 94   %
Corporate bonds 50,570     50,493     50,414     64,720     65,194     *     (22 ) %
Other 20,409     15,933     18,837     14,609     10,249     28   % 99   %
Total investment securities 4,466,652     4,448,323     4,408,095     4,583,051     4,603,756     *     (3 ) %
Trading securities 1,831,492     1,263,633     1,391,405     1,564,201     1,443,969     45   % 27   %
Other earning assets:                                          
Federal funds sold 10,192     9,700     21,225     47,664     113,043     5   % (91 ) %
Securities purchased under agreements to resell 816,794     645,979     550,641     593,412     428,687     26   % 91   %
Interest-bearing cash (e) 548,036     586,495     545,784     648,927     1,717,696     (7 ) % (68 ) %
Total other earning assets 1,375,022     1,242,174     1,117,650     1,290,003     2,259,426     11   % (39 ) %
Total earning assets 38,787,789     38,242,259     37,388,777     36,716,101     36,290,852     1   % 7   %
Allowance for loan losses (f) (353,794 )   (195,863 )   (196,586 )   (188,243 )   (182,332 )   81   % 94   %
Cash and due from banks 609,701     609,750     596,323     590,622     610,470     *     *    
Fixed income receivables 111,474     75,917     75,938     64,958     55,393     47   % NM    
Premises and equipment, net 450,931     450,950     451,567     478,607     485,462     *     (7 ) %
Derivative assets 254,736     202,624     160,341     83,050     55,288     26   % NM    
Other assets 3,691,075     3,500,153     3,464,541     3,497,912     3,568,059     5   % 3   %
Total assets $ 43,551,912     $ 42,885,790     $ 41,940,901     $ 41,243,007     $ 40,883,192     2   % 7   %
                               
Liabilities and equity:                                        
Interest-bearing liabilities:                                        
Interest-bearing deposits:                                        
Consumer interest $ 13,760,968     $ 13,718,820     $ 13,670,745     $ 13,597,195     $ 13,390,692     *     3   %
Commercial interest 6,006,364     6,145,681     6,321,835     6,599,793     6,577,476     (2 ) % (9 ) %
Market-indexed (g) 4,448,587     4,370,025     4,143,012     3,818,949     4,734,295     2   % (6 ) %
Total interest-bearing deposits 24,215,919     24,234,526     24,135,592     24,015,937     24,702,463     *     (2 ) %
Federal funds purchased 746,686     1,163,701     886,445     519,497     370,868     (36 ) % NM    
Securities sold under agreements to repurchase 777,692     701,213     722,815     691,490     688,765     11   % 13   %
Trading liabilities 750,520     585,889     501,203     548,653     375,169     28   % NM    
Other short-term borrowings (h) 1,686,690     844,558     535,585     650,387     114,474     NM     NM    
Term borrowings (i) 791,043     928,214     1,185,853     1,183,205     1,172,618     (15 ) % (33 ) %
Total interest-bearing liabilities 28,968,550     28,458,101     27,967,493     27,609,169     27,424,357     2   % 6   %
Noninterest-bearing deposits 8,666,087     8,542,521     8,235,806     7,947,607     7,795,015     1   % 11   %
Fixed income payables 54,900     34,510     33,059     25,579     21,978     59   % NM    
Derivative liabilities 16,171     59,114     19,632     61,715     94,943     (73 ) % (83 ) %
Other liabilities 843,810     751,676     722,570     729,776     737,664     12   % 14   %
Total liabilities 38,549,518     37,845,922     36,978,560     36,373,846     36,073,957     2   % 7   %
Equity:                                        
Common stock 194,827     194,574     194,930     196,319     198,460     *     (2 ) %
Capital surplus 2,935,372     2,928,463     2,934,276     2,964,824     3,015,017     *     (3 ) %
Undivided profits (j) 1,686,986     1,766,211     1,695,417     1,629,474     1,572,177     (4 ) % 7   %
Accumulated other comprehensive loss, net (205,846 )   (240,435 )   (253,337 )   (312,511 )   (367,474 )   (14 ) % 44   %
Preferred stock 95,624     95,624     95,624     95,624     95,624     *     *    
Noncontrolling interest (k) 295,431     295,431     295,431     295,431     295,431     *     *    
Total equity 5,002,394     5,039,868     4,962,341     4,869,161     4,809,235     (1 ) % 4   %
Total liabilities and equity $ 43,551,912     $ 42,885,790     $ 41,940,901     $ 41,243,007     $ 40,883,192     2   % 7   %

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

NM - Not meaningful

*Amount is less than one percent.

(a) In 3Q19, FHN prospectively reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses is immaterial.
(b) In 1Q20, the Permanent Mortgage portfolio was combined into Consumer Real Estate portfolio, all prior periods were revised for comparability.
(c) Includes loans on nonaccrual status.
(d) 1Q20 includes $491.3 million of SBA and USDA loans, $94.1 million of mortgage loans, and $5.1 million of other consumer loans.
(e) Includes excess balances held at Fed.
(f) Effective 1/1/2020 FHN adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” (CECL) which resulted in an increase to the allowance for loan losses of $103.4 million.
(g) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.
(h) Balance fluctuates largely based on the level of FHLB borrowings as a result of loan demand and deposit levels; 1Q20 increase used to support commercial loan growth, including loans to mortgage companies.
(i) In 4Q19 $400 million of First Horizon Bank senior capital notes matured.
(j) Effective 1/1/2020 FHN adopted ASU 2016-13 (CECL) which resulted in a net decrease to undivided profits of $96.1 million.
(k) Consists of preferred stock of subsidiaries.
5

FHN CONSOLIDATED NET INTEREST INCOME (a)

Quarterly, Unaudited

 

                                                     
                      1Q20 Changes vs.
(Thousands) 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
Interest Income:                                      
Loans, net of unearned income (b) $ 328,526     $ 356,176     $ 357,724     $ 354,067     $ 334,167     (8 ) % (2 ) %
Loans held-for-sale 6,899     7,053     6,069     8,128     9,877     (2 ) % (30 ) %
Investment securities:                                          
U.S. government agencies 25,127     26,500     26,322     29,075     30,107     (5 ) % (17 ) %
States and municipalities 542     478     431     347     362     13   % 50   %
Corporate bonds 591     595     593     713     712     (1 ) % (17 ) %
Other 1,732     1,352     1,634     1,278     895     28   % 94   %
Total investment securities 27,992     28,925     28,980     31,413     32,076     (3 ) % (13 ) %
Trading securities 13,338     9,507     10,645     13,332     13,712     40   % (3 ) %
Other earning assets:                                          
Federal funds sold 27     51     141     326     733     (47 ) % (96 ) %
Securities purchased under agreements to resell 2,303     2,467     2,800     3,301     2,336     (7 ) % (1 ) %
Interest-bearing cash 1,536     2,359     2,700     3,689     10,209     (35 ) % (85 ) %
Total other earning assets 3,866     4,877     5,641     7,316     13,278     (21 ) % (71 ) %
Interest income $ 380,621     $ 406,538     $ 409,059     $ 414,256     $ 403,110     (6 ) % (6 ) %
                                 
Interest Expense:                                        
Interest-bearing deposits:                                        
Consumer interest $ 18,337     $ 22,957     $ 26,670     $ 25,666     $ 24,641     (20 ) % (26 ) %
Commercial interest 19,061     24,366     28,112     29,927     28,153     (22 ) % (32 ) %
Market-indexed (c) 17,091     20,090     23,809     23,409     29,416     (15 ) % (42 ) %
Total interest-bearing deposits 54,489     67,413     78,591     79,002     82,210     (19 ) % (34 ) %
Federal funds purchased 2,214     5,026     4,898     3,142     2,287     (56 ) % (3 ) %
Securities sold under agreements to repurchase 2,623     2,843     3,301     3,580     3,496     (8 ) % (25 ) %
Trading liabilities 3,292     2,987     2,943     3,756     2,816     10   % 17   %
Other short-term borrowings 5,027     3,989     3,333     4,316     961     26   % NM    
Term borrowings (d) 7,921     10,491     13,752     14,683     14,337     (24 ) % (45 ) %
Interest expense 75,566     92,749     106,818     108,479     106,107     (19 ) % (29 ) %
Net interest income - tax equivalent basis 305,055     313,789     302,241     305,777     297,003     (3 ) % 3   %
Fully taxable equivalent adjustment (2,253 )   (2,396 )   (1,565 )   (2,167 )   (2,495 )   6   % 10   %
Net interest income $ 302,802     $ 311,393     $ 300,676     $ 303,610     $ 294,508     (3 ) % 3   %

NM - Not meaningful

(a) Net interest income adjusted to a fully taxable equivalent (“FTE”) basis assuming a statutory federal income tax of 21 percent and, where applicable, state income taxes.
(b) Includes interest on loans in nonaccrual status.
(c) Market-indexed deposits are tied to an index not administered by FHN and are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.
(d) In 4Q19 $400 million of First Horizon Bank senior capital notes matured.
6

FHN CAPITAL HIGHLIGHTS

Quarterly, Unaudited

 

                                                     
                              1Q20 Changes vs.
(Dollars and shares in thousands) 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
Common equity tier 1 capital (a) (b) (c) $ 3,421,763     $ 3,408,936     $ 3,326,059     $ 3,270,484     $ 3,239,249     *     6   %
Tier 1 capital (a) (b) (c) 3,812,203     3,760,450     3,679,158     3,620,001     3,583,577     1   % 6   %
Total capital (a) (c) 4,319,384     4,154,885     4,065,306     4,009,116     3,963,901     4   % 9   %
                                 
Risk-weighted assets (“RWA”) (a) (b) (d) 40,169,550     37,045,782     36,913,347     35,341,740     33,656,950     8   % 19   %
Average assets for leverage (a) (b) 42,348,418     41,583,446     40,660,442     40,022,187     39,717,387     2   % 7   %
                                 
Common equity tier 1 ratio (a) (b) (c) 8.52   % 9.20   % 9.01   % 9.25   % 9.62   %            
Tier 1 ratio (a) (b) (c) 9.49   % 10.15   % 9.97   % 10.24   % 10.65   %            
Total capital ratio (a) (c) 10.75   % 11.22   % 11.01   % 11.34   % 11.78   %            
Leverage ratio (a) (b) (c) 9.00   % 9.04   % 9.05   % 9.04   % 9.02   %            
                                 
Total equity to total assets (c) 10.71   % 11.72   % 11.43   % 11.68   % 11.79   %            
Period-end shares outstanding (e) 311,863     311,469     311,180     312,478     315,361     *     (1 ) %
Cash dividends declared per common share $ 0.15     $ 0.14     $ 0.14     $ 0.14     $ 0.14     7   % 7   %
Book value per common share (c) $ 14.96     $ 15.04     $ 14.80     $ 14.51     $ 14.13                
Market capitalization (millions) (f) $ 2,513.6     $ 5,157.9     $ 5,041.1     $ 4,665.3     $ 4,408.7                

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

* Amount is less than one percent.

(a) Current quarter is an estimate.
(b) See Glossary of Terms for definition.
(c) 1Q20 includes the impact of CECL adoption; amount calculated under the interim final rule to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.
(d) 1Q20 increase in risk-weighted assets due to period-end commercial loan growth (primarily loans to mortgage companies), higher draw activity in March, and increased market risk assets for Fixed Income.
(e) Decreases largely attributable to shares repurchased under share repurchase programs.
(f) 1Q20 decrease driven by a sharp decline in FHN’s share price attributable to market uncertainty associated with the COVID-19 pandemic.
7

FHN BUSINESS SEGMENT HIGHLIGHTS

Quarterly, Unaudited

 

                                                     
                      1Q20 Changes vs.
(Thousands) 1Q20     4Q19     3Q19     2Q19     1Q19     4Q19 1Q19
                             
Regional Banking                                        
Net interest income $ 300,128     $ 310,808     $ 302,483     $ 297,449     $ 286,023     (3 ) % 5   %
Noninterest income 81,871     89,553     85,776     81,474     73,029     (9 ) % 12   %
Total revenues 381,999     400,361     388,259     378,923     359,052     (5 ) % 6   %
Provision for loan losses (a) 145,435     14,370     20,471     17,776     13,442     NM     NM    
Noninterest expense (b) 211,013     202,124     192,427     192,354     198,569     4   % 6   %
Income before income taxes 25,551     183,867     175,361     168,793     147,041     (86 ) % (83 ) %
Provision for income taxes 4,388     43,285     41,984     39,759     34,109     (90 ) % (87 ) %
Net income $ 21,163     $ 140,582     $ 133,377     $ 129,034     $ 112,932     (85 ) % (81 ) %
                             
Fixed Income                                        
Net interest income $ 10,914     $ 7,232     $ 5,311     $ 6,171     $ 7,332     51   % 49   %
Noninterest income (c) 95,723     81,185     77,809     65,622     53,807     18   % 78   %
Total revenues 106,637     88,417     83,120     71,793     61,139     21   % 74   %
Noninterest expense (d) 81,063     62,090     67,576     55,534     50,533     31   % 60   %
Income before income taxes 25,574     26,327     15,544     16,259     10,606     (3 ) % NM    
Provision/(benefit) for income taxes 6,099     6,362     3,708     3,840     2,457     (4 ) % NM    
Net income $ 19,475     $ 19,965     $ 11,836     $ 12,419     $ 8,149     (2 ) % NM    
                             
Corporate                                        
Net interest income/(expense) $ (13,359 )   $ (12,826 )   $ (13,339 )   $ (7,146 )   $ (7,914 )   (4 ) % (69 ) %
Noninterest income (3,718 )   11,246     7,359     9,401     13,353     NM     NM    
Total revenues (17,077 )   (1,580 )   (5,980 )   2,255     5,439     NM     NM    
Noninterest expense (e) 15,449     59,210     43,217     56,873     41,779     (74 ) % (63 ) %
Income/(loss) before income taxes (32,526 )   (60,790 )   (49,197 )   (54,618 )   (36,340 )   46   % 10   %
Provision/ (benefit) for income taxes (6,372 )   (15,616 )   (11,881 )   (13,525 )   (11,771 )   59   % 46   %
Net income/(loss) $ (26,154 )   $ (45,174 )   $ (37,316 )   $ (41,093 )   $ (24,569 )   42   % (6 ) %
                             
Non-Strategic                                        
Net interest income $ 5,119     $ 6,179     $ 6,221     $ 7,136     $ 9,067     (17 ) % (44 ) %
Noninterest income (f) 880     1,323     791     1,496     856     (33 ) % 3   %
Total revenues 5,999     7,502     7,012     8,632     9,923     (20 ) % (40 ) %
Provision/(provision credit) for loan losses (a) (435 )   (4,370 )   (5,471 )   (4,776 )   (4,442 )   90   % 90   %
Noninterest expense (g) 3,794     4,023     4,452     (4,367 )   5,209     (6 ) % (27 ) %
Income before income taxes 2,640     7,849     8,031     17,775     9,156     (66 ) % (71 ) %
Provision for income taxes 652     1,939     1,985     4,393     2,263     (66 ) % (71 ) %
Net income $ 1,988     $ 5,910     $ 6,046     $ 13,382     $ 6,893     (66 ) % (71 ) %
                             
Total Consolidated                                        
Net interest income $ 302,802     $ 311,393     $ 300,676     $ 303,610     $ 294,508     (3 ) % 3   %
Noninterest income 174,756     183,307     171,735     157,993     141,045     (5 ) % 24   %
Total revenues 477,558     494,700     472,411     461,603     435,553     (3 ) % 10   %
Provision/(provision credit) for loan losses (a) 145,000     10,000     15,000     13,000     9,000     NM     NM    
Noninterest expense 311,319     327,447     307,672     300,394     296,090     (5 ) % 5   %
Income before income taxes 21,239     157,253     149,739     148,209     130,463     (86 ) % (84 ) %
Provision for income taxes 4,767     35,970     35,796     34,467     27,058     (87 ) % (82 ) %
Net income $ 16,472     $ 121,283     $ 113,943     $ 113,742     $ 103,405     (86 ) % (84 ) %

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

NM - Not meaningful

* Amount is less than one percent.

(a) 1Q20 increase in provision expense primarily associated with a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.
(b) 1Q20 includes a $9.1 million increase in the expense on unfunded commitments due to a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic.
(c) 1Q20 includes elevated levels of commissionable revenues, partially offset by elevated levels of trading losses driven by extreme volatility in March 2020.
(d) 3Q19 includes a $7.5 million unfavorable adjustment associated with the net impact of the resolution of legal matters.
(e) Refer to the Acquisition, Restructuring, and Rebranding expense tables on page 3 for additional information about variability in quarterly balances; 4Q19 includes $11.0 million of charitable contributions; 3Q19 includes $4.0 million of valuation adjustments associated with derivatives related to prior sales of Visa Class B shares.
(f) 2Q19 includes $1.1 million of gains from the reversal of previous valuation adjustments due to the sales and payoff of TRUPS loans.
(g) 2Q19 includes an $8.3 million expense reversal related to the resolution of legal matters.
8

FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited

 

                                                                     
                                    1Q20 Changes vs.
(Dollars in thousands)   1Q20   4Q19   3Q19   2Q19   1Q19   4Q19   1Q19
                                       
Allowance for Loan Losses Walk-Forward                        
Beginning reserve   $ 200,307     $ 193,149     $ 192,749     $ 184,911     $ 180,424     4%   11%
ASU Adoption 2016-13 (a)   106,394     -     -     -     -     NM   NM
Provision/(provision credit) for loan losses (a)   145,000     10,000     15,000     13,000     9,000     NM   NM
Charge-offs   (13,453 )   (11,646 )   (24,337 )   (12,223 )   (10,527 )   (16)%   (28)%
Recoveries   6,242     8,804     9,737     7,061     6,014     (29)%   4%
Ending balance   $ 444,490     $ 200,307     $ 193,149     $ 192,749     $ 184,911     NM   NM
Reserve for unfunded commitments (b)   39,303     6,101     6,890     7,524     8,014     NM   NM
Total allowance for loan losses plus reserve for unfunded commitments   $ 483,793     $ 206,408     $ 200,039     $ 200,273     $ 192,925     NM   NM
                                       
Allowance for Loan Losses (a) (c)                            
Regional Banking   $ 413,552     $ 182,730     $ 174,246     $ 170,849     $ 160,914     NM   NM
Non-Strategic   30,938     17,577     18,903     21,900     23,997     76%   29%
Total allowance for loan losses   $ 444,490     $ 200,307     $ 193,149     $ 192,749     $ 184,911     NM   NM
                                       
Nonperforming Assets                                                
Regional Banking                                                                                             
Nonperforming loans (d)   $ 142,916     $ 113,187     $ 118,506     $ 145,265     $ 115,977     26%   23%
OREO   10,278     12,347     13,408     13,251     16,698     (17)%   (38)%
Total Regional Banking   $ 153,194     $ 125,534     $ 131,914     $ 158,516     $ 132,675     22%   15%
Non-Strategic                                                
Nonperforming loans   $ 45,595     $ 47,651     $ 52,346     $ 57,654     $ 63,960     (4)%   (29)%
Nonperforming loans held-for-sale after fair value adjustments   3,611     4,047     4,199     4,514     5,219     (11)%   (31)%
OREO   3,603     3,313     4,408     3,342     3,978     9%   (9)%
Total Non-Strategic   $ 52,809     $ 55,011     $ 60,953     $ 65,510     $ 73,157     (4)%   (28)%
Corporate                                                
Nonperforming loans   $ 1,302     $ 1,327     $ 1,643     $ 1,667     $ 1,687     (2)%   (23)%
Total nonperforming assets   $ 207,305     $ 181,872     $ 194,510     $ 225,693     $ 207,519     14%   *
                                       
Net Charge-Offs                                                
Regional Banking   $ 8,119     $ 5,886     $ 17,074     $ 7,841     $ 5,540     38%   47%
Non-Strategic   (908 )   (3,044 )   (2,474 )   (2,679 )   (1,027 )   70%   12%
Total net charge-offs/(recoveries)   $ 7,211     $ 2,842     $ 14,600     $ 5,162     $ 4,513     NM   60%
                                       
Consolidated Key Ratios (e)                                      
30+ Delinq. % (f)   0.19   %     0.19   %     0.23   %     0.20   %     0.23   %          
NPL %   0.57       0.52       0.55       0.69       0.65            
NPA %   0.61       0.57       0.61       0.74       0.72            
Net charge-offs % (g)   0.10       0.04       0.19       0.07       0.07            
Allowance / loans % (a)   1.33       0.64       0.62       0.65       0.66            
Allowance / NPL (a)   2.34   x     1.24   x     1.12   x     0.94   x     1.02   x          
Allowance / NPA (a)   2.18   x     1.13   x     1.01   x     0.87   x     0.91   x          
Allowance / net charge-offs   15.33   x     17.76   x     3.33   x     9.31   x     10.10   x          
                                       
Other                                                
Loans past due 90 days or more and still accruing (h)   $ 20,340     $ 28,343     $ 27,182     $ 28,663     $ 30,896     (28)%   (34)%
Guaranteed portion (h)   5,165     6,417     6,028     5,628     5,725     (20)%   (10)%
Period-end loans, net of unearned income (millions)   33,378     31,061     31,261     29,713     27,990     7%   19%
30+ delinquencies (thousands)   $ 62,642     $ 57,911     $ 70,675     $ 58,861     $ 63,693     8%   (2)%

NM - Not meaningful

* Amount is less than one percent.

(a) 1Q20 increase in ALLL and allowance ratios is due to a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic and the adoption of CECL.
(b) 1Q20 increase is due to the adoption of CECL ($24.0 million) and a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic ($9.2 million).
(c) In 2Q19, the Home Builder Finance (“HBF”) portfolio was retrospectively reclassified from the Regional Banking segment to the Non-Strategic segment.
(d) 3Q19 decrease in nonperforming loans was primarily driven by one mortgage warehouse lending relationship that converted to the underlying collateral.
(e) See Glossary of Terms for definitions of Consolidated Key Ratios.
(f) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(g) 3Q19 increase in charge-offs as a percentage of loans was primarily driven by two credits.
(h) Includes loans held-for-sale.
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FHN ASSET QUALITY: CONSOLIDATED

Quarterly, Unaudited

 

                                                           
                                  1Q20 Changes vs.
    1Q20   4Q19   3Q19   2Q19   1Q19   4Q19   1Q19
                                       
Key Portfolio Details                                                
C&I (a)                                      
Period-end loans ($ millions)   $ 22,124       $ 20,051       $ 20,294       $ 19,054       $ 17,176       10%   29%
30+ Delinq. % (b) (c)   0.08   %   0.05   %   0.11   %   0.05   %   0.07   %        
NPL % (d)   0.43       0.37       0.38       0.56       0.44            
Charge-offs % (qtr. annualized) (e)   0.12       0.07       0.32       0.14       0.06            
Allowance / loans % (f)   1.15   %   0.61   %   0.56   %   0.61   %   0.60   %        
Allowance / net charge-offs   10.88   x   9.25   x   1.87   x   4.77   x   11.26   x        
                                       
Commercial Real Estate (a)                                      
Period-end loans ($ millions)   $ 4,640       $ 4,337       $ 4,229       $ 3,861       $ 3,947       7%   18%
30+ Delinq. % (b)   0.01   %   0.02   %   0.04   %   0.07   %   0.04   %        
NPL %   0.05       0.04       0.05       0.07       0.07            
Charge-offs % (qtr. annualized)   0.00       NM       0.02       0.02       0.04            
Allowance / loans % (f)   1.03   %   0.83   %   0.84   %   0.85   %   0.87   %        
Allowance / net charge-offs   NM       NM       47.70   x   39.25   x   22.50   x        
                                       
Consumer Real Estate (g)                                      
Period-end loans ($ millions)   $ 6,119       $ 6,177       $ 6,245       $ 6,303       $ 6,361       (1)%   (4)%
30+ Delinq. % (b) (h)   0.66   %   0.70   %   0.68   %   0.66   %   0.70   %        
NPL %   1.49       1.39       1.50       1.50       1.63            
Charge-offs % (qtr. annualized)   NM       NM       NM       NM       NM            
Allowance / loans % (f)   2.01   %   0.46   %   0.49   %   0.50   %   0.54   %        
Allowance / net charge-offs   NM       NM       NM       NM       NM            
                                       
Credit Card and Other                                      
Period-end loans ($ millions)   $ 495       $ 496       $ 493       $ 495       $ 506       *   (2)%
30+ Delinq. % (b)   0.99   %   0.93   %   0.94   %   1.06   %   1.20   %        
NPL %   0.07       0.07       0.07       0.09       0.09            
Charge-offs % (qtr. annualized)   2.12       2.29       2.10       2.17       2.44            
Allowance / loans % (f)   3.91   %   2.68   %   2.58   %   2.46   %   2.50   %        
Allowance / net charge-offs   1.83   x   1.14   x   1.21   x   1.13   x   1.01   x        

NM - Not meaningful

* Amount is less than one percent.

(a) In 3Q19, FHN reclassified approximately $410 million of regional banking market investor CRE loans from the C&I portfolio to the CRE portfolio. The reclassification did not have an impact on FHN’s consolidated balance sheet and the impact to the consolidated financial statements from the effect on the allowance for loan losses is immaterial. No adjustments were made to prior periods as the impact of the reclassification, including the effect on the allowance for loan losses was deemed to be immaterial in all periods.
(b) 30+ Delinquency % includes all accounts delinquent more than one month and still accruing interest.
(c) 1Q20 increase in delinquencies as a percentage of total loans was primarily driven by two credits; 3Q19 increase in delinquencies as a percentages of total loans was primarily driven by one credit.
(d) 1Q20 increase in NPLs as a percentage of total loans was primarily driven by one credit; 2Q19 increase in NPLs as a percentage of total loans was primarily driven by one credit.
(e) 1Q20 increase in charge-offs as a percentage of total loans was primarily driven by one credit; 3Q19 increase in charge-offs as a percentage of loans was primarily driven by two credits; 2Q19 increase in charge-offs as a percentage of total loans was primarily driven by one credit.
(f) 1Q20 increase in allowance as a percentage of total loans was driven by a sudden, steep decline in the economic forecast attributable to the COVID-19 pandemic and the adoption of CECL.
(g) In 1Q20, the Permanent Mortgage portfolio was combined into Consumer Real Estate portfolio, all prior periods were revised for comparability.
(h) 3Q19 increase in delinquencies as a percentage of total loans was primarily driven by two credits.
10

FHN GLOSSARY OF TERMS

 

 

 

Average Assets for Leverage: The amount of assets a company uses to calculate the leverage ratio, which includes average total assets less disallowed portions of goodwill, other intangibles, and deferred tax assets, as well as certain other regulatory adjustments made to tier 1 capital.

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

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

 

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

Market-Indexed Deposits: Deposits with pricing tied to an index not administered by FHN. For FHN these are comprised of insured network deposits, correspondent banking deposits, and trust/sweep deposits.

 

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

 

 

 

Key Ratios

 

 

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

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

Fee Income to Total Revenue: Ratio is fee income excluding securities gains/(losses) to total revenue excluding securities gains/(losses).

Efficiency Ratio: Ratio is noninterest expense to total revenue excluding securities gains/(losses).

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

 

 

Asset Quality - Consolidated Key Ratios

 

 

NPL %: Ratio is nonperforming loans in the loan portfolio to total period-end loans.

NPA %: Ratio is nonperforming assets related to the loan portfolio to total period-end loans plus foreclosed real estate and other assets.

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

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

Allowance / NPL: Ratio is allowance for loan losses to nonperforming loans in the loan portfolio.

Allowance / NPA: Ratio is allowance for loan losses to nonperforming assets related to the loan portfolio.

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

 

11