Goodwill

On July 1, 2020, FHN completed its merger-of-equals transaction with IBKC. In connection with the merger, FHN recorded a $531 million purchase accounting gain, based on fair value estimates.

On July 17, 2020, FHN completed its purchase of 30 branches from Truist Bank. In relation to the acquisition, FHN recorded $78 million in goodwill, based on fair value estimates. See Note 2 - Acquisitions and Divestitures for additional information regarding these transactions.

FHN performed the required annual goodwill impairment test as of October 1, 2021. The annual impairment test did not indicate impairment in any of FHN’s reporting units as of the testing date. Following the testing date, management evaluated the events and circumstances that could indicate that goodwill might be impaired and concluded that a subsequent interim test was not necessary.

As further discussed in Note 20 - Business Segment Information, FHN reorganized its management reporting structure during 2020 and, accordingly, its segment reporting structure and goodwill reporting units. In connection with the reorganization, management reallocated goodwill to the new reporting units using a relative fair value approach.

Accounting estimates and assumptions were made about FHN’s future performance and cash flows, as well as other prevailing market factors (e.g., interest rates, economic

trends, etc.) when determining fair value as part of the goodwill impairment test. While management used the best information available to estimate future performance for each reporting unit, future adjustments to management’s projections may be necessary if conditions differ substantially from the assumptions used in making the estimates.

The following is a summary of goodwill by reportable segment included in the Consolidated Balance Sheets as of December 31, 2021:

Table 8.7.1

GOODWILL


(Dollars in millions)	Regional Banking		Specialty Banking		Total
December 31, 2018	$	802	$	631	$	1,433
Additions	—		—		—
December 31, 2019	$	802	$	631	$	1,433
Additions	78		—		78
December 31, 2020	$	880	$	631	$	1,511
Additions	—		—		—
December 31, 2021	$	880	$	631	$	1,511

Other intangible assets

The following table, which excludes fully amortized intangibles, presents other intangible assets included in the Consolidated Balance Sheets:

Table 8.7.2

OTHER INTANGIBLE ASSETS


	December 31, 2021						December 31, 2020
(Dollars in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Core deposit intangibles	$	371	$	(128)	$	243	$	371	$	(81)	$	290
Client relationships	37		(11)		26		37		(8)		29
Other (a)	41		(12)		29		41		(6)		35
Total	$	449	$	(151)	$	298	$	449	$	(95)	$	354

(a)Includes noncompete covenants and purchased credit card intangible assets. Also includes title plant intangible assets and state banking licenses which are not subject to amortization.

Amortization expense was $56 million, $40 million, and $25 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table shows the aggregated amortization expense estimated, as of December 31, 2021, for the next five years:

Table 8.7.3

ESTIMATED AMORTIZATION EXPENSE


(Dollars in millions)
2022	$	51
2023	48
2024	44
2025	38
2026	33