First Horizon Corporation · NYSE:FHN
First Horizon — Investor Day (June 2023)
21 slides from First Horizon's investor day presentation, Jun 6, 2023
Slide 1: First Horizon Investor Day
PS = 20 Purpose driven (am) oF : = Client centered HORIZON Z Value focused —
Slide 2: Disclaimers
Disclaimers Non-GAAP Information Certain measures included in this document are “non-GAAP,” meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Non-GAAP measures are
Slide 3: Appendix
FIRST HORIZON. Appendix INVESTOR DAY NON WO
Slide 4: 2022 company-run stress test results
2022 company-run stress test results Company-run stress test results demonstrate strong ability to navigate the Fed CCAR Severely Adverse Scenario while maintaining capital levels well above regulatory minimums Federal Reserve CCAR Severely Adverse Scenario Capital Fed-run CCAR Peers1 • Updated comp
Slide 5: 2022 company-run stress test results
2022 company-run stress test results Countercyclical businesses help First Horizon outperform peers in latest stress test Key Stress Test Ratios1 Fixed Income Contribution 6.4% $300 30% $250 25% $200 20% $150 15% 2.5% 2.1% 2.3% $100 10% $50 5% 0.2% $0 0% -1.1% Loan Loss PPNR Pre-tax Net Income Total
Slide 6: Actively managing balance sheet sensitivity
Actively managing balance sheet sensitivity Interest-rate sensitivity managed in part with interest rate hedges Loan repricing profile Balance sheet hedges Interest rate sensitivity ARMs 9% +100bps -100bps Swaps +5.7% -6.2% Fixed $60b 42% $5.2b Variable Floors 34% 57% change in next 12 months’ NII f
Slide 7: Our ESG strategy is supported by our people strategy
Our ESG strategy is supported by our people strategy Our “Here for Good” strategy is an instrumental foundation for our future success ESG framework guided by five interrelated pillars Our vision is to be an employer of choice, while fostering opportunity, development and effectiveness to win with t
Slide 8: Environmental Social Governance (ESG)
Environmental Social Governance (ESG) Five pillars help guide our decisions to achieve our “Here for Good” strategy Governance Associates Clients Communities Environment Serve clients Strengthen our Operate responsibly Invest in our extraordinarily well communities through and positively Lead with s
Slide 9: Key ESG Milestones (2021-2023)
Key ESG Milestones (2021-2023) Environmental Social Governance • Announced $50 million commitment to • Assigned ESG oversight to NCG committee • Calculated and reported Scope 1 &2 communities of the board of directors location-based GHG emissions using 2019 as baseline year • Launched enterprise-wid
Slide 10: Reconciliation to GAAP financials
Reconciliation to GAAP financials Adjusted pre-provision net revenue ("PPNR") per share (in millions except per share data) 2017 2018 2019 2020 2021 2022 1Q23 Net interest income (GAAP) $ 842 $ 1,220 $ 1,210 $ 1,662 $ 1,994 $ 2,392 $ 688 Noninterest income (GAAP) $ 490 $ 723 $ 654 $ 1,492 $ 1,076 $
Slide 11: Reconciliation to GAAP financials
Reconciliation to GAAP financials Adjusted Net Income ("NI") and Adjusted Return on Average Assets ("ROAA") (in millions) 2017 2018 2019 2020 2021 2022 1Q23 Net Income ("NI") (GAAP) $ 177 $ 557 $ 452 $ 857 $ 1,010 $ 912 $ 256 Plus Tax effected notable items (GAAP) (a) $ 112 $ (78) $ 90 $ (294) $ 179
Slide 12: Reconciliation to GAAP financials
Reconciliation to GAAP financials Return on Average Common Equity ("ROCE")/Return on Average Tangible Common Equity ("ROTCE")/Adjusted ROTCE (in millions) 2017 2018 2019 2020 2021 2022 1Q23 Net income available to common shareholders ("NAIC") (GAAP) $ 159 $ 539 $ 435 $ 822 $ 962 $ 868 $ 243 Plus Tax
Slide 13: Reconciliation to GAAP financials
Reconciliation to GAAP financials Tangible Common Equity to Tangible Assets ("TCE/TA") (Non-GAAP) and Proforma TCE/TA (in millions) 1Q22 1Q23 Tangible Common Equity (Non-GAAP) Total equity (GAAP) a $ 8,696 $ 8,895 Less: Noncontrolling interest (a) $ 295 $ 295 Less: Preferred stock (a) $ 1,014 $ 1,01
Slide 14: Reconciliation to GAAP financials
Reconciliation to GAAP financials Adjusted Efficiency Ratio and Adjusted Revenue – taxable-equivalent ("TE") Adjusted pre-provision net revenue ("PPNR") (in millions) 1Q22 1Q23 (in millions) 1Q22 1Q23 Noninterest expense (GAAP) a $ 493 $ 478 Net interest income (GAAP) $ 479 $ 688 Plus notable items
Slide 15: Reconciliation to GAAP financials
Reconciliation to GAAP financials (in millions) Legacy FHN Legacy IBKC FHN Combined historical net interest income - taxable 2020 equivalent (Non-GAAP) & Adjusted combined historical Combined revenue - taxable-equivalent (Non-GAAP) 1H20 1H20 2H20 (b) 2020 2021 2022 1Q23 2023 Annualized Net interest
Slide 16: Reconciliation to GAAP financials
Reconciliation to GAAP financials (in millions) Legacy FHN Legacy IBKC FHN Adjusted components of noninterest income 2020 2023 (Non-GAAP) 1H20 1H20 2H20 Combined (b) 2020 2021 2022 1Q23 Annualized Noninterest income (GAAP): Fixed income (GAAP) $ 208 $ - $ 215 $ 423 $ 423 $ 406 $ 205 $ 39 $ 158 Mortg
Slide 17: Reconciliation to GAAP financials
Reconciliation to GAAP financials (in millions) Legacy FHN Legacy IBKC FHN 2020 2023 Adjusted components of noninterest expense (Non-GAAP) 1H20 1H20 2H20 Combined (b) 2020 2021 2022 1Q23 Annualized Noninterest expense (GAAP): Total personnel expense (GAAP) $ 384 $ 211 $ 649 $ 1,243 $ 1,033 $ 1,210 $
Slide 18: Reconciliation to GAAP financials
Reconciliation to GAAP financials (in millions) Legacy FHN Legacy IBKC FHN 2020 2023 Adjusted Efficiency Ratio 1H20 1H20 2H20 Combined (b) 2020 2021 2022 1Q23 Annualized Noninterest expense (GAAP) a $623 $372 $1,095 $2,090 $1,718 $2,095 $1,953 $478 $1,938 Plus notable items (GAAP) (a) (20) (18) (150
Slide 19: Reconciliation to GAAP financials
Reconciliation to GAAP financials (in millions) Legacy Legacy FHN FHN IBKC 2020 Notable Items: Line Item 2017 2018 2019 2020 2021 2022 1Q22 1Q23 1H20 2H20 Combined (c) Purchase accounting gain (a) All other noninterest income $ - $ - $ - $ 533 $ (1) $ - $ - $ - $ - $ - $ 533 $ 533 Gain related to eq
Slide 20: Reconciliation to GAAP financials
Reconciliation to GAAP financials Regional Banking (a) Legacy Legacy Combined (in billions) FHN IBKC FHN (b) Combined Historical Deposit and Loan Growth 1Q20 1Q20 1Q20 1Q23 Growth Deposits $ 27.6 $ 24.8 $ 52.3 $ 57.2 9% Loans $ 17.8 $ 21.3 $ 39.0 $ 42.3 8% Legacy Legacy Combined (in millions) FHN IB
Slide 21: Reconciliation to GAAP financials
Reconciliation to GAAP financials Specialty Banking (a) Combined (in millions) Legacy FHN Legacy IBKC FHN FHN (b) 1Q23 Pre-provision net revenue ("PPNR") 1H20 1H20 2H20 2020 2021 2022 1Q23 Annualized CAGR Specialty Banking Total Revenue (GAAP) $ 468 $ 124 $ 684 $ 1,277 $ 1,217 $ 869 $ 179 $ 726 Noni