Footnotes
1 2022 notable items include $87 million
of pretax transaction-related expenses associated with TD, $48 million of net pretax merger-related expenses associated with IBKC, $22
million of Visa derivative valuation adjustment expense, $22 million pretax gain on the sale of the title services business, $16 million
pretax gain on equity securities investments, $12 million mortgage servicing rights gain, and $25 million of taxes associated with these
items. 2021 notable items include $182 million of net pretax merger-related expenses associated with IBKC, $19 million of Visa derivative
valuation adjustment expense, $26 million loss on retirement of legacy IBKC trust preferred securities, $6 million deferred compensation
costs resulting from litigation tied to a fully divested company and $56 million of taxes associated with these items. 2021 also includes
a $1 million reduction of purchase accounting gain related to the IBKC merger that is non-taxable. Diluted shares were 566 million and
551 million in 2022 and 2021, respectively.
2 Loan growth before the impact
of paycheck protection program (“PPP”) and loans to mortgage companies (“LMC”) is a Non-GAAP measure and is
calculated by excluding $76 million and $1,038 million of PPP loans and $2,258 million and $4,518 million of LMC loans from $58,102
million and $54,859 million of total loans in 2022 and 2021, respectively.
Use of Non-GAAP Measures
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. FHN’s management believes such measures, even though not always comparable to non-GAAP
measures used by other financial institutions, are relevant to understanding the financial condition, capital position, and financial
results of FHN and its business segments. The non-GAAP measure presented in this letter is loan growth before the impact of paycheck protection
program and loans to mortgage companies and is reconciled to the most comparable GAAP presentation in footnote 2.
Forward-Looking Statements
This communication contains certain “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”), with respect to First Horizon Corporation’s (the “First Horizon”) 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. The words “believe,” “expect,” “anticipate,”
“intend,” “target”, “plan”, “estimate,” “should,” “likely,” “will,”
“going forward” and other expressions that indicate future events and trends identify forward-looking statements.
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 the control of First Horizon, and many of which, with respect to future business decisions
and actions, are subject to change and which could cause actual results to differ materially from those contemplated or implied by forward-looking
statements or historical performance. Examples of uncertainties and contingencies include factors previously disclosed in First Horizon’s
reports filed with the U.S. Securities and Exchange Commission (the “SEC”) as well as the following factors, among others:
the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate
the definitive merger agreement between First Horizon and The Toronto-Dominion Bank (“TD”); the outcome of any legal proceedings
that may be instituted against First Horizon or TD, including potential litigation that may be instituted against First Horizon or its
directors or officers related to the pending transaction or the definitive merger agreement between First Horizon and TD related to the
pending transaction; the timing and completion of the transaction, including the possibility that the pending transaction will not close
when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied
on a timely basis or at all, or are obtained subject to conditions that are not anticipated; interloper risk; the risk that any announcements
relating to the pending combination could have adverse effects on the market price of the common stock of First Horizon; certain restrictions
during the pendency of the merger that may impact First Horizon’s ability to pursue certain business opportunities or strategic
transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected
factors or events; diversion of management’s attention from ongoing business operations and opportunities; reputational risk and
potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion
of the transaction; First Horizon’s success in executing its business plans and strategies and managing the risks involved in the
foregoing; currency and interest rate fluctuations; exchange rates; success of hedging activities; material adverse changes in economic
and industry conditions, including the availability of short and long-term financing; general competitive, economic, political and market
conditions; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; inflation; customer borrowing,
repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; other
actions of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the Tennessee Department of Financial Institutions and other regulators, legislative and regulatory actions and reforms;
the pandemic created by COVID-19 and its variants, and resulting effects on economic conditions, restrictions imposed by public health
authorities or governments, fiscal and monetary policy responses by governments and financial institutions, and disruptions to global
supply chains; and other factors that may affect future results of First Horizon.
We caution that the foregoing list of important
factors that may affect future results is not exhaustive. Additional factors that could cause results to differ materially from those
contemplated by forward-looking statements can be found in First Horizon’s Annual Report on Form 10-K for the year ended December
31, 2022, and in its subsequent Quarterly Reports on Form 10-Q filed with the SEC and available in the “Investor Relations”
section of First Horizon’s website, http://www.first horizon.com, under the heading “SEC Filings” and in other documents
First Horizon files with the SEC.
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