IBERIABANK and First Horizon Announce Merger of Equals
LAFAYETTE, La. — First Horizon National Corp. (First Horizon) and IBERIABANK Corporation (IBERIABANK) today announced that they have entered into a definitive agreement where the companies will combine in an all-stock merger of equals. The companies will make the announcement during a press conference today, from 5 p.m. to 5:30 p.m., at IBERIABANK (601 Poydras St., 20th Floor Lobby) with Daryl G. Byrd, president and CEO of IBERIABANK and D. Bryan Jordan, chairman, president and CEO of First Horizon. Details were shared in a press release.
Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, the combined holding company and bank will operate under the First Horizon name and will be headquartered in Memphis, Tennessee. Once the transaction is completed, the combined company will be one of the largest financial services companies headquartered in the south and one of the top 25 banks in the U.S. in deposits.
The combined organization will have $75 billion in assets, $57 billion in deposits and $55 billion in loans. The merger combines two complementary franchises that are uniquely positioned to capitalize on market opportunities and increase their client base through greater scale, strategic investments in advanced technologies and expanded product offerings.
Under the terms of the merger agreement, IBERIABANK shareholders will receive 4.584 shares of First Horizon for each IBERIABANK share they own. First Horizon shareholders will own 56% and IBERIABANK shareholders will own 44% of the combined company. Additionally, IBERIABANK shareholders will receive a 43% increase in their dividend after consummation of the transaction, based upon each company’s current dividend per share.
“Our merger of equals with IBERIABANK is an exciting milestone and the logical next step in the continued successful transformation of our company. Separately, we are both formidable organizations with strong track records, great businesses and talented bankers,” said Jordan. “Together, First Horizon and IBERIABANK will create a powerful new company driven by our shared commitment to our customers, communities, shareholders and the employees we serve. We are pleased to have a partner with a complementary people-focused culture, shared values and a growth- oriented business model. Our combined new scale, deep experience in financial services and diverse business mix in the South uniquely position us to accelerate our growth and create lasting shareholder value.”
“This merger of equals represents an exciting next chapter for both companies. By joining forces with First Horizon, we will create an organization that has the resources to invest in advanced technologies and expand lending capacity and product offerings for our combined clients,” said Byrd. “We chose a partner who values deep relationships and is culturally aligned with our core mission, which is to create a great place to work for employees, deliver extraordinary, value-based client service, meet the expectations of our shareholders and invest in the communities we serve. Our partnership will leverage our best-in-class workforce and build on and complement the well-established strong foundations of both organizations. We look forward to bringing our companies together to better serve our clients and communities.”
- Enhanced Scale to Drive Growth – The combined company will be a significant player throughout the Southern market, with $75 billion in assets. This combination enhances the combined company’s ability to invest in advanced technologies and innovation to strengthen its business and create a competitive advantage in a dynamic market environment.
- Complementary Market Presence – The combination strengthens the competitive position in high-growth, demographically attractive Southern markets. The pro forma bank branch footprint is located in 15 of the Top 20 Southern MSAs by population and in 11 states throughout the combined footprint.
- Diversified Business Mix – The combined company will have a well-diversified revenue mix with earnings streams from unique lending capabilities and distinct fee income businesses across a broader customer base. The combined organization will offer a broader and more comprehensive suite of products and services for commercial, consumer and small business clients.
- Experienced Combined Management Team with Strong Cultural Alignment – In addition to a strong track record of successfully executing and integrating multiple large transactions, the combined management team has significant experience in leading regional banks. Together, First Horizon and IBERIABANK are committed to preserving the strong cultures of both companies to deliver superior client service.
- Significant EPS and Earnings Accretion – The transaction is projected to deliver approximately 16% EPS accretion to First Horizon and approximately 22% EPS accretion to IBERIABANK by year-end 2021.
- Substantial Cost Synergies – The transaction is expected to deliver approximately $170 million in pre-tax cost synergies, primarily driven by annual run-rate cost savings such as redundancies in overhead, bank branches, operations and computer services.
- Peer Leading Profitability – The combined company will be well-positioned to achieve peer leading profitability and operating metrics.
- Industry Leading Operating Metrics – The franchise is expected to deliver top-tier operating and return metrics with cost savings on a fully-phased in basis, including:
- Return on Average Tangible Common Equity of approximately 18%
- Return on Average Assets of approximately 1.4%, and
- Efficiency Ratio of approximately 51%.
New Company Governance and Leadership Team
The combined company will be headquartered in Memphis and will maintain a significant operating presence in all of the markets in which both companies operate today. The combined company’s regional banking headquarters will be located in New Orleans.
Timing and Approvals
The merger is expected to close in the second quarter of 2020, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company.