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Form 8-K FIRST HORIZON CORP For: Jul 16

July 16, 2021 6:42 AM




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First Horizon Corporation Reports Second Quarter Net Income Available to Common Shareholders of $295 Million,
or EPS of $0.53; $321 Million, or $0.58, on an Adjusted basis*

Second quarter 2021 ROTCE of 20.4% improved from 15.9% in first quarter 2021; Adjusted ROTCE of 22.2% improved from 20.2%*

Tangible book value per share of $10.74 up 4% from first quarter 2021

MEMPHIS, TN (July 16, 2021) – First Horizon Corporation (NYSE: FHN or “First Horizon”) today reported second quarter 2021 net income available to common shareholders ("NIAC") of $295 million, or earnings per share of $0.53, compared with first quarter 2021 NIAC of $225 million, or earnings per share of $0.40. Second quarter 2021 results were reduced by a net $26 million after-tax, or $0.05 per share, of notable items largely related to the IBERIABANK Corporation Merger ("IBKC Merger") compared with a net $60 million after-tax reduction, or $0.11 per share, in first quarter 2021. Excluding notable items, adjusted second quarter 2021 NIAC of $321 million, or $0.58 per share, increased from $284 million, or $0.51 per share in first quarter.

“We demonstrated solid performance in the quarter with net income available to common shareholders of $295 million reflecting the benefit of improving overall economic conditions and credit quality, our diversified business model, and strong focus on execution despite challenging conditions across the banking industry," said President and Chief Executive Officer Bryan Jordan. “We remain focused on controlling the things we can control including expenses and deposit pricing and making investments that drive future growth. We are seeing increasing loan pipeline growth and expect demand and economic growth to pick up in the back half of the year as the economy continues to normalize.”

“It has been a little more than a year since we closed our merger with IBERIABANK,” Jordan continued, “I am extremely pleased with the progress we have made bringing two companies together and proud of our associates for their extraordinary efforts and unwavering commitment to our clients, communities and company.”

Notable and Unusual Items
Notable Items
Quarterly, Unaudited
($s in millions, except per share data)2Q211Q212Q20
Summary of Notable Items:
Purchase accounting gain$(2)$1 $— 
Merger/acquisition expense(32)(70)(14)
Other notable expense— (10)— 
Total Notable items (pre-tax)$(34)$(79)$(14)
Total Notable items (after-tax)(26)(60)(12)
EPS impact of notable items$(0.05)$(0.11)$(0.04)

Second quarter 2021 earnings were reduced by a net $26 million after-tax impact, or $0.05 per share, tied to notable items compared with a net $60 million impact, or $0.11 per share, in first quarter 2021. Second quarter notable items largely related to the IBKC Merger and include:
•$32 million of merger-related expense largely tied to IBKC merger integration costs.
•$(2) million purchase accounting gain adjustment related to the IBKC Merger.
•Pre-tax merger costs now expected to total ~$500 million, up ~$40 million, given increased complexity tied to product and capabilities enhancements, post-pandemic vendor and staffing constraints and accelerated branch closures/change in mix of branch types than initially planned.
*ROTCE, PPNR, and "Adjusted" results (which exclude notable items) are Non-GAAP Financial Measures; NII, Total Revenue, NIM and PPNR are presented on a fully taxable equivalent basis; References to loans include leases and EPS are based on diluted shares; Capital ratios are preliminary. See page 5 for information on our use of Non-GAAP measures and their reconciliation to GAAP beginning on page 21.
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Second Quarter 2021 Highlights*
•Total revenue of $781 million decreased 3% from first quarter 2021 levels driven by expected reductions in fixed income and mortgage banking fees and continued net interest income headwinds.
•Noninterest expense of $497 million decreased $47 million from first quarter 2021 driven by a $48 million decrease in notable items largely tied to the IBKC Merger. Adjusted noninterest expense of $465 million remained relatively stable with first quarter 2021 levels, in part reflecting the benefit of a $4 million increase in merger cost saves.
•Provision for credit losses benefit of $115 million improved $70 million from first quarter 2021, largely reflecting the impact of an improved macroeconomic outlook, positive credit migration, and reduced loan balances.
•Average interest earning assets of $81.0 billion increased $2.3 billion from first quarter 2021 largely as a $3.8 billion increase in excess cash was partially offset by a $1.4 billion decrease in loans given post-pandemic impacts on overall market conditions.
•Average deposits of $73.2 billion increased $2.2 billion, or 3%, from first quarter 2021 driven by a $2.1 billion increase in noninterest-bearing deposits largely reflecting the impact of stimulus checks and Payroll Protection Program ("PPP") loan funding.
•Allowance for credit losses to loans ratio of 1.57% decreased from 1.70% at March 31, 2021; the allowance for loan losses to nonperforming loans ratio of 237% increased from 232% at March 31, 2021.
•Net recoveries of 0.07% in second quarter 2021 compared to net charge-offs of 0.06% in first quarter 2021 reflecting continued improvement in overall asset quality; nonperforming loans of $344 million decreased 13% from $394 million and the nonperforming loan ratio of 0.61% improved from 0.67% as of March 31, 2021.
•Tangible book value per share of $10.74 at June 30, 2021 increased 4% from $10.30 at March 31, 2021 as robust net income was partially offset by the impact of capital return.
•ROCE of 15.5%; ROTCE of 20.4%; Adjusted ROTCE of 22.2%; CET 1 ratio of 10.3%; and total capital ratio of 13.2%.
•Returned $141 million of capital to common shareholders including dividends.
•Repurchased 3.1 million shares of common stock during the quarter.

Strategic Update
•Progress across key merger milestones including conversion of mortgage and retail brokerage platform.
•Achieved $92 million of annualized net cost saves in second quarter 2021; on track to deliver a targeted $200 million of annualized net cost saves.
•Completed the VirtualBank systems conversion in July 2021.
•Expect to fully integrate systems in the Fall of 2021.

COVID-19 Update
•Funded approximately $1.6 billion of new PPP loans in 2021 compared with $4.2 billion in full year 2020.
•Loans on deferral represented 0.7% of total loans excluding PPP as of June 30, 2021, stable with March 31, 2021 levels.
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SUMMARY RESULTS, Continued
Quarterly, Unaudited
2Q21 Change vs.
($s in millions, except per share and balance sheet data)2Q211Q212Q201Q212Q20
$/bp%$/bp%
Income Statement
Interest income - taxable equivalent1
$545 $555 $349 $(10)(2)$196 56 
Interest expense- taxable equivalent1
45 45 41 — — 4 10 
Net interest income- taxable equivalent500 511 308 (11)(2)192 62 
Less: Taxable-equivalent adjustment3 3 3 — — — — 
Net interest income497 $508 $305 $(11)(2)192 63 
Noninterest income285 298 206 (13)(4)79 38 
      Total revenue781 806 512 (25)(3)269 53 
Noninterest expense497 544 321 (47)(9)176 55 
Pre-provision net revenue4
284 262 191 22 8 93 49 
Provision for credit losses5
(115)(45)121 (70)NM (236)NM
Income before income taxes399 307 69 92 30 330 NM
Provision for income taxes88 71 13 17 24 75 NM
Net income311 235 57 76 32 254 NM
Net income attributable to noncontrolling interest3 3 3 — — — 5 
Net income attributable to controlling interest308 233 54 75 32 254 NM
Preferred stock dividends13 8 2 5 63 11 NM
Net income available to common shareholders$295 $225 $52 $70 31 $243 NM
Adjusted net income5
$337 $295 $68 $42 14 $269 NM
Adjusted net income available to common shareholders5
$321 $284 $64 $37 13 $257 NM
Common stock information
EPS$0.53 $0.40 $0.17 $0.13 32 $0.36 NM
Adjusted EPS5
$0.58 $0.51 $0.20 $0.07 14 $0.38 NM
Diluted shares557 558 313 (1)— 244 78 
Key performance metrics
Net interest margin2.47 %2.63 %2.90 %(16)bp(43)bp
Efficiency ratio63.67 67.53 62.74 (386)93 
Adjusted efficiency ratio6
59.17 57.49 59.65 168 (48)
Effective income tax rate22.03 23.24 18.40 (121)363 
Return on average assets1.42 1.12 0.48 30 94 
Adjusted return on average assets6
1.54 1.40 0.57 14 97 
Return on average common equity (“ROCE")15.45 12.01 4.50 344 1,095 
Return on average tangible common equity (“ROTCE”)6
20.36 15.90 6.74 446 1,362 
Adjusted ROTCE6
22.18 20.15 8.26 203 1,392 
Noninterest income as a % of total revenue36.43 37.00 40.32 (57)(389)
Adjusted noninterest income as a % of total revenue6
36.49 %36.78 %40.12 %(29)bp(363)bp
Balance Sheet (billions)
Average loans$56.8 $58.2 $34.0 $(1.4)(2)$22.9 67 
Average deposits73.2 71.0 37.5 2.2 3 35.6 95 
Average assets87.6 85.4 47.9 2.2 3 39.6 83 
Average common equity$7.7 $7.6 $4.7 $0.1 1 $3.0 64 
Asset Quality Highlights
Allowance for credit losses to loans and leases1.57 %1.70 %1.80 %(13)bp(23)bp
Net charge-off ratio(0.07)0.06 0.20 (13)(27)
Nonperforming loan and leases ratio0.61 %0.67 %0.69 %(6)bp(8)bp
Capital Ratio Highlights (current quarter is an estimate)
Common Equity Tier 110.33 %9.97 %9.25 %36 bp108 bp
Tier 111.50 11.04 10.69 46 81 
Total Capital13.21 12.84 12.47 37 74 
Tier 1 leverage8.23 %8.20 %8.55 %3 bp(32)bp
Numbers may not foot due to rounding.
Certain previously reported amounts have been reclassified to agree with current presentation.
See footnote disclosures on page 20.



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Second Quarter 2021 versus First Quarter 2021
Net interest income
Net interest income of $497 million declined $11 million from first quarter 2021. Results reflect the impact of a decrease in average loans, lower spreads and short-term rates partially offset by improved deposit costs. Net interest margin of 2.47% decreased from 2.63% in the prior quarter, largely driven by a 12 basis point reduction tied to excess cash. Core net interest margin, excluding the impact of net merger accounting accretion, PPP loans and excess cash, decreased 4 basis points largely reflecting the impact of lower loan balances partially offset by a reduction in deposit costs.

Noninterest income
Noninterest income of $285 million decreased $13 million from strong first quarter 2021 levels. Results reflect a decrease in fixed income and mortgage banking and title fees partially offset by higher card and digital banking fees, deferred compensation and other noninterest income. Fixed income average daily revenue decreased to $1.4 million from very strong first quarter 2021 levels reflecting a continued favorable operating environment including elevated liquidity and weak loan demand among depository customers.

Noninterest expense
Noninterest expense of $497 million decreased $47 million from first quarter 2021 driven by a net $48 million decrease in notable items largely related to the IBKC merger. Adjusted noninterest expense of $465 million was relatively stable with first quarter 2021 levels and included a $4 million benefit tied to incremental merger cost saves.

Loans and leases
Average loan and lease balances of $56.8 billion decreased $1.4 billion from first quarter 2021 reflecting an $813 million decrease in commercial and a $580 million decrease in consumer. Commercial loan trends largely reflected a $1.1 billion decrease in loans to mortgage companies partially offset by a $272 million increase in PPP balances. Period-end loans and leases of $56.7 billion decreased $1.9 billion from first quarter 2021 given a $1.6 billion decrease in commercial and a $311 million decrease in consumer. Period-end commercial loan trends largely reflected a $1.2 billion decrease in PPP loans and a $656 million decrease in loans to mortgage companies partially offset by an increase in other commercial categories.

Deposits
Average deposits of $73.2 billion increased $2.2 billion from first quarter 2021 driven by a $2.1 billion increase in noninterest-bearing deposits. Period-end deposits of $73.3 billion remained relatively stable with first quarter 2021 levels as a $673 million decrease in interest-bearing deposits was more than offset by an increase in non interest-bearing. Interest-bearing deposit costs of 20 basis points remained stable with first quarter 2021 levels, reflecting continued benefit of pricing discipline offset by reduced merger-related time deposit amortization benefits.

Asset quality
Provision for credit losses benefit of $115 million compared to a benefit of $45 million in first quarter 2021, largely reflecting the impact of an improved macroeconomic outlook, positive credit migration, and reduced loan balances.

Net recoveries of $10 million, or 7 basis points, improved from net charge-offs of $8 million, or 6 basis points, in first quarter 2021 reflecting continued improvement in overall asset quality.

Nonperforming loans of $344 million decreased $50 million from first quarter 2021 driven by a reduction in consumer real estate- secured and commercial and industrial categories. Second quarter 2021 allowance to nonperforming coverage ratio of 237% compared with 232% in first quarter 2021. Second quarter 2021 nonperforming loans to loans ratio of 61 basis points compared with 67 basis points in first quarter 2021.

The allowance for credit losses to loans ratio decreased to 1.57% from 1.70% in first quarter 2021 reflecting an overall improvement in the macroeconomic environment and asset quality.
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Capital
CET1 ratio of 10.3% in second quarter 2021 improved from 10.0% in first quarter 2021. The improvement was driven by growth in retained earnings and a reduction in risk-weighted assets tied to lower loan balances; the increase was partially offset by capital return through share repurchases and dividends.
First Horizon returned $141 million in capital to common stockholders during the quarter including $57 million, or 3.1 million shares, of common stock repurchases.
In May, First Horizon issued $150 million of 4.70% Series F Preferred stock and announced the redemption of its $100 million 6.20% Series A Preferred stock and all related depository shares which subsequently redeemed in July.

Income taxes
The second quarter 2021 effective tax rate of 22.0% decreased from first quarter 2021 rate of 23.2%. On an adjusted basis, the effective tax rate of 22.2% in second quarter 2021 decreased from 23.4% in first quarter 2021.

Conference call information
Analysts, investors and interested parties may call toll-free starting at 8:15 a.m. CT on July 16 by dialing 1-888-317-6003 (if calling from the U.S.) or 412-317-6061 (if calling from outside the U.S) and entering access code 0216267. The conference call will begin at 8:30 a.m. CT.

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

A replay of the call will be available beginning at noon CT on July 16 until midnight CT on July 30. To listen to the replay, dial 1-877-344-7529 (U.S. callers) or 412-317-0088 (international callers); the access code is 10156505. A replay of the webcast will also be available at http://ir.fhnc.com/Event and will be archived on the site for one year.

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

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

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

Use of Non-GAAP Measures and Regulatory Measures that are not GAAP
Certain measures included in this report are “non-GAAP,” meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to FHN. Although other entities may use calculation methods that differ from those used by FHN for non-
5

GAAP measures, FHN’s management believes such measures are relevant to understanding the financial condition, capital position, and financial results of FHN and its business segments. Non-GAAP measures are reported to FHN’s management and Board of Directors through various internal reports.

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

Presentation of regulatory measures, even those which are not GAAP, provide a meaningful base for comparability to other financial institutions subject to the same regulations as FHN, as demonstrated by their use by banking regulators in reviewing capital adequacy of financial institutions. Although not GAAP terms, these regulatory measures are not considered “non-GAAP” under U.S. financial reporting rules as long as their presentation conforms to regulatory standards. Regulatory measures used in this financial supplement include: common equity tier 1 capital ("CET1"), generally defined as common equity less goodwill, other intangibles, and certain other required regulatory deductions; tier 1 capital, generally defined as the sum of core capital (including common equity and instruments that cannot be redeemed at the option of the holder) adjusted for certain items under risk based capital regulations; and risk-weighted assets, which is a measure of total on- and off-balance sheet assets adjusted for credit and market risk, used to determine regulatory capital ratios.

Refer to the tabular reconciliation of non-GAAP to GAAP measures and presentation of the most comparable GAAP items beginning on page 21.


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CONSOLIDATED INCOME STATEMENT
Quarterly, Unaudited
     2Q21 Change vs.
($s in millions, except per share data)2Q211Q214Q203Q202Q201Q212Q20
$ %$ %
Interest income - taxable equivalent1
$545 $555 $578 $601 $349 $(10)(2)%$196 56 %
Interest expense- taxable equivalent1
45 45 53 66 41 — — 4 10 
Net interest income- taxable equivalent500 511 525 535 308 (11)(2)192 62 
Less: Taxable-equivalent adjustment3 3 3 3 3 — — — — 
Net interest income497 508 522 532 305 (11)(2)192 63 
Noninterest income:
Fixed income102 126 104 111 112 (24)(19)(10)(9)
Mortgage banking and title38 53 57 66 4 (15)(28)34 NM
Brokerage, trust, and insurance35 33 31 30 22 2 6 13 60 
Service charges and fees54 53 53 50 35 1 2 19 53 
Card and digital banking fees21 17 18 17 12 4 24 9 77 
Deferred compensation income7 3 9 4 8 4 133 (1)(14)
Other noninterest income2
27 15 16 546 12 12 80 15 118 
Total noninterest income285 298 288 823 206 (13)(4)79 38 
Total revenue781 806 810 1,355 512 (25)(3)269 53 
Noninterest expense:
Personnel expense:
Salaries and benefits191 196 200 201 111 (5)(3)80 71 
Incentives and commissions109 120 110 126 79 (11)(9)30 37 
Deferred compensation expense6 3 9 3 9 3 100 (3)(36)
Total personnel expense306 318 319 329 200 (12)(4)106 53 
Occupancy and equipment3
75 76 76 77 46 (1)(1)29 62 
Outside services63 58 59 78 38 5 9 25 65 
Amortization of intangible assets14 14 15 15 5 — — 9 NM
Other noninterest expense40 78 39 89 31 (38)(49)9 29 
Total noninterest expense497 544 508 587 321 (47)(9)176 55 
Pre-provision net revenue4
284 262 302 768 191 22 8 93 49 
Provision for credit losses5
(115)(45)1 227 121 (70)NM (236)NM
Income before income taxes399 307 301 541 69 92 30 330 NM
Provision for income taxes88 71 56 2 13 17 24 75 NM
Net income311 235 245 539 57 76 32 254 NM
Net income attributable to noncontrolling interest3 3 3 3 3 — — — 5 
Net income attributable to controlling interest308 233 242 536 54 75 32 254 NM
Preferred stock dividends13 8 8 13 2 5 63 11 NM
Net income available to common shareholders$295 $225 $234 $523 $52 $70 31 %$243 NM
Common Share Data
EPS$0.54 $0.41 $0.42 $0.95 $0.17 $0.13 31 $0.37 NM
Basic shares550 552 553 550 312 (2)— 238 76 
Diluted EPS$0.53 $0.40 $0.42 $0.95 $0.17 $0.13 32 $0.36 NM
Diluted shares557 558 557 551 313 (1)— 244 78 
Effective tax rate22.0 %23.2 %18.7 %0.4 %18.4 %
Numbers may not foot due to rounding. See footnote disclosures on page 20.
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ADJUSTED5 FINANCIAL DATA - SEE NOTABLE ITEMS ON PAGE 9
Quarterly, Unaudited
     2Q21 Change vs.
($s in millions, except per share data)2Q211Q214Q203Q202Q201Q212Q20
$%$%
Net interest income (FTE)1
$500 $511 $525 $535 $308 $(11)(2)%$192 62 %
Adjusted noninterest income:
Fixed income102 126 104 111 112 (24)(19)(10)(9)
Mortgage banking and title38 53 57 66 4 (15)(28)34 NM
Brokerage, trust, and insurance35 33 31 30 22 2 6 13 59 
Service charges and fees54 53 53 50 35 1 2 19 54 
Card and digital banking fees21 17 18 17 12 4 24 9 75 
Deferred compensation income7 3 9 4 8 4 133 (1)(13)
Adjusted other noninterest income29 14 15 14 12 15 107 17 142 
Adjusted total noninterest income$287 $297 $288 $291 $206 $(10)(3)%$81 39 %
Total revenue (FTE)1
$787 $808 $813 $826 $514 $(21)(3)%$273 53 %
Adjusted noninterest expense:
Adjusted personnel expense:
Adjusted salaries and benefits$191 $195 $200 $200 $107 $(4)(2)%$84 79 %
Adjusted Incentives and commissions93 99 89 91 79 (6)(6)%14 18 
Deferred compensation expense6 3 9 3 9 3 100 %(3)(33)
Adjusted total personnel expense290 297 298 294 195 (7)(2)%95 49 
Adjusted occupancy and equipment3
75 72 74 73 46 3 4 %29 63 
Adjusted outside services56 54 52 46 33 2 4 %23 70 
Adjusted amortization of intangible assets13 13 14 14 5 — — %8 NM
Adjusted other noninterest expense31 28 35 45 27 3 11 %4 15 
Adjusted total noninterest expense$465 $464 $474 $471 $307 $1 — %$158 51 %
Adjusted pre-provision net revenue4
$321 $343 $339 $355 $207 $(22)(6)%$114 55 %
Adjusted provision for credit losses5
$(115)$(45)$1 $80 $121 $(70)NM $(236)NM
Adjusted net income available to common shareholders$321 $284 $255 $193 $64 $37 13 %$257 NM
Adjusted Common Share Data
Adjusted diluted EPS$0.58 $0.51 $0.46 $0.35 $0.20 $0.07 14 %$0.38 NM
Diluted shares557 558 557 551 313 (1)— %244 78 %
Adjusted effective tax rate22.2 %23.4 %20.7 %23.3 %18.3 %
Adjusted ROTCE22.2 %20.2 %18.2 %13.9 %8.3 %
Adjusted efficiency ratio59.2 %57.5 %58.3 %57.1 %59.7 %
Numbers may not foot due to rounding.
See footnote disclosures on page 20.

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NOTABLE ITEMS
Quarterly, Unaudited
(In millions)2Q211Q214Q203Q202Q20
Summary of Notable Items:
Purchase accounting gain$(2)$1 $1 $532 $— 
Merger/acquisition non-PCD provision expense— — — (147)— 
Merger/acquisition expense*(32)(70)(34)(101)(14)
Charitable contributions— — — (15)— 
Other notable expenses— (10)— — — 
Total notable items$(34)$(79)$(33)$269 $(14)
EPS impact of notable items$(0.05)$(0.11)$(0.04)$0.60 $(0.04)
Numbers may not foot due to rounding
*3Q20 includes $20 million of charitable contributions to establish the First Horizon Louisiana Foundation.


IMPACT OF NOTABLE ITEMS:
Quarterly, Unaudited
     
(In millions)2Q211Q214Q203Q202Q20
Impacts of Notable Items:
Noninterest income:
Other noninterest income$2 $(1)$(1)$(532)$— 
Total noninterest income$2 $(1)$(1)$(532)$— 
Noninterest expense:
Personnel expenses:
Salaries and benefits$— $— $— $(1)$(5)
Incentives and commissions(16)(21)(21)(34)— 
Deferred compensation expense— — — — — 
Total personnel expenses(16)(21)(21)(35)(5)
Occupancy and equipment3
— (4)(2)(4)— 
Outside services(6)(4)(7)(32)(5)
Amortization of intangible assets(1)(1)(1)(1)— 
Other noninterest expense(9)(50)(4)(44)(4)
Total noninterest expense$(32)$(80)$(34)$(116)$(14)
Provision for credit losses$— $— $— $(147)$— 
Income before income taxes$34 $79 $33 $(269)$14 
Provision for income taxes8 19 13 61 3 
Net income/(loss) available to common shareholders$26 $60 $20 $(331)$12 
Numbers may not foot due to rounding

9



FINANCIAL RATIOS
Quarterly, Unaudited
     2Q21 change vs.
2Q211Q214Q203Q202Q201Q212Q20
FINANCIAL RATIOS$/bp%$/bp%
Net interest margin2.47 %2.63 %2.71 %2.84 %2.90 %(16)bp(43)bp
Return on average assets1.42 %1.12 %1.16 %2.63 %0.48 %30 94 
Adjusted return on average assets6
1.54 %1.40 %1.26 %1.01 %0.57 %14 97 
Return on average common equity (“ROCE”)15.45 %12.01 %12.53 %28.49 %4.50 %344 1,095 
Return on average tangible common equity (“ROTCE”)6
20.36 %15.90 %16.73 %37.75 %6.74 %446 1,362 
Adjusted ROTCE5
22.18 %20.15 %18.18 %13.90 %8.26 %203 1,392 
Noninterest income as a % of total revenue36.43 %37.00 %35.61 %60.72 %40.32 %(57)(389)
Adjusted noninterest income as a % of total revenue6
36.49 %36.78 %35.42 %35.20 %40.12 %(29)(363)
Efficiency ratio63.67 %67.53 %62.71 %43.31 %62.74 %(386)93 
Adjusted efficiency ratio6
59.17 %57.49 %58.34 %57.06 %59.65 %168 (48)
CAPITAL DATA
CET1 capital ratio*
10.33 %9.97 %9.68 %9.21 %9.25 %36 bp108 bp
Tier 1 capital ratio*11.50 %11.04 %10.74 %10.25 %10.69 %46 bp81 bp
Total capital ratio*13.21 %12.84 %12.57 %12.05 %12.47 %37 bp74 bp
Tier 1 leverage ratio*8.23 %8.20 %8.24 %8.25 %8.55 %3 bp(32)bp
Risk-weighted assets (“RWA”) (billions)$61.7 $62.3 $63.1 $64.5 $37.4 $(1)(1)%$24 65 %
Total equity to total assets 9.74 %9.49 %9.86 %9.81 %10.71 %25 bp(97)bp
Tangible common equity/tangible assets (“TCE/TA”)6
6.87 %6.64 %6.89 %6.78 %6.63 %23 bp24 bp
Period-end shares outstanding (millions)551 552 555 555 312 (2)— 239 76 %
Cash dividends declared per common share$0.15 $0.15 $0.15 $0.15 $0.15 $— — $— — 
Book value per common share$14.07 $13.65 $13.59 $13.30 $14.96 $0.42 3 $(0.89)(6)%
Tangible book value per common share6
$10.74 $10.30 $10.23 $9.92 $9.99 $0.44 4 %$0.75 8 %
SELECTED BALANCE SHEET DATA
Loans-to-deposit ratio (period-end balances)77.36 %80.09 %83.21 %87.28 %86.62 %(274)bp(927)bp
Loans-to-deposit ratio (average balances)77.68 %82.02 %85.90 %89.59 %90.52 %(434)bp(1,284)bp
Full-time equivalent associates8,145 8,284 8,466 8,121 5,006 (139)(2)%3,139 63 %
Certain previously reported amounts have been reclassified to agree with current presentation
*Current quarter is an estimate.
See footnote disclosures on page 20.
10

CONSOLIDATED PERIOD-END BALANCE SHEET
Quarterly, Unaudited 
     2Q21 change vs.
(In millions)2Q211Q214Q203Q202Q201Q212Q20
$%$%
Assets:      
Loans and leases:
Commercial, financial, and industrial (C&I)$32,528 $33,951 $33,103 $33,656 $21,394 $(1,423)(4)%$11,134 52 %
Commercial real estate12,292 12,470 12,275 12,511 4,813 (178)(1)7,479 NM
Total Commercial44,820 46,421 45,379 46,167 26,207 (1,601)(3)18,613 71 
Consumer real estate10,864 11,053 11,725 12,328 6,052 (189)(2)4,812 79 
Credit card and other7
1,002 1,126 1,128 1,212 449 (124)(11)553 123 
Total Consumer11,867 12,178 12,853 13,540 6,502 (311)(3)5,365 83 
Loans and leases, net of unearned income56,687 58,600 58,232 59,707 32,709 (1,913)(3)23,978 73 
Loans held for sale977 811 1,022 1,051 746 166 20 232 31 
Investment securities8,398 8,361 8,057 8,006 5,486 36 — 2,912 53 
Trading securities1,035 1,076 1,176 1,386 1,116 (41)(4)(82)(7)
Interest-bearing deposits with banks13,451 11,635 8,351 5,443 3,136 1,816 16 10,315 NM
Federal funds sold and securities purchased under agreements to resell622 520 445 593 415 102 20 207 50 
Total interest earning assets81,170 81,004 77,284 76,186 43,608 166 — 37,562 86 
Cash and due from banks1,303 1,169 1,203 1,075 604 134 11 699 116 
Goodwill and other intangible assets, net1,836 1,850 1,864 1,876 1,552 (14)(1)284 18 
Premises and equipment, net714 719 759 756 448 (5)(1)266 59 
Allowance for loan and lease losses(815)(914)(963)(988)(538)99 11 (277)(52)
Other assets3,700 3,685 4,063 4,125 2,970 15 — 730 25 
Total assets$87,908 $87,513 $84,209 $83,030 $48,645 $395 — %$39,264 81 %
Liabilities and Shareholders' Equity:
Deposits:
Savings$27,416 $27,023 $27,324 $26,573 $13,532 $392 1 %$13,883 103 %
Time deposits4,304 4,653 5,070 5,526 2,656 (349)(8)1,648 62 
Other interest-bearing deposits15,728 16,444 15,415 14,925 9,784 (716)(4)5,944 61 
Total interest-bearing deposits47,447 48,120 47,810 47,025 25,972 (673)(1)21,476 83 
Trading liabilities531 454 353 477 233 77 17 298 128 
Short-term borrowings2,246 2,203 2,198 2,142 2,392 43 2 (146)(6)
Term borrowings1,672 1,671 1,670 2,162 2,032 1 — (360)(18)
Total interest-bearing liabilities51,896 52,448 52,030 51,805 30,628 (552)(1)21,268 69 
Noninterest-bearing deposits25,833 25,046 22,173 21,384 11,788 787 3 14,045 119 
Other liabilities1,613 1,712 1,699 1,696 1,020 (99)(6)593 58 
Total liabilities79,343 79,206 75,903 74,885 43,436 137 — 35,906 83 
Shareholders' Equity:
Preferred stock520 470 470 470 240 50 11 280 116 
Common stock344 345 347 347 195 (1)— 149 76 
Capital surplus4,997 5,036 5,073 5,061 2,941 (39)(1)2,056 70 
Retained earnings2,613 2,402 2,261 2,111 1,672 211 9 941 56 
Accumulated other comprehensive loss, net(203)(242)(140)(140)(135)39 16 (68)(51)
Combined shareholders' equity8,270 8,012 8,012 7,849 4,913 258 3 3,357 68 
Noncontrolling interest295 295 295 295 295 — — — — 
Total shareholders' equity8,566 8,307 8,307 8,144 5,208 259 3 3,358 64 
Total liabilities and shareholders' equity$87,908 $87,513 $84,209 $83,030 $48,645 $395 — %$39,263 81 %
Memo:
Total Deposits$73,281 $73,167 $69,982 $68,409 $37,759 $114 — %$35,521 94 %
Numbers may not foot due to rounding. See footnote disclosures on page 20.
11

CONSOLIDATED AVERAGE BALANCE SHEET
Quarterly, Unaudited 
     2Q21 change vs.
(In millions)2Q211Q214Q203Q202Q201Q212Q20
$%$%
Assets: