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First Horizon and IBERIABANK are merging

MEMPHIS, Tenn. (localmemphis.com) – First Horizon bank announced Monday it is merging with IBERIABANK Corp. The combined company will operate under the Fi...

MEMPHIS, Tenn. (localmemphis.com) – First Horizon bank announced Monday it is merging with IBERIABANK Corp. The combined company will operate under the First Horizon name and be based in Memphis.

Below is the news release from the announcement:

First Horizon National Corp. (“First Horizon”) (NYSE: FHN) andIBERIABANK Corporation (“IBERIABANK”) (NASDAQ: IBKC) today announced that theyhave entered into a definitive agreement under which the companies will combinein an all-stock merger of equals.

Under the terms of the agreement, which was unanimously approvedby the Boards of Directors of both companies, the combined holding company andbank will operate under the First Horizon name and will be headquartered inMemphis, Tenn. Once the transaction is completed, the combined company will beone of the largest financial services companies headquartered in the South andone of the top 25 banks in the U.S. in deposits.

The combined organization will have $75 billion in assets, $57billion in deposits and $55 billion in loans. The merger combines twocomplementary franchises that are uniquely positioned to capitalize on marketopportunities and increase their client base through greater scale, strategicinvestments in advanced technologies and expanded product offerings.

Under the terms of the merger agreement, IBERIABANK shareholderswill receive 4.584 shares of First Horizon for each IBERIABANK share they own.First Horizon shareholders will own 56% and IBERIABANK shareholders will own44% of the combined company. Additionally, IBERIABANK shareholders will receivea 43% increase in their dividend after consummation of the transaction, basedupon each company’s current dividend per share.

Bryan Jordan, Chairman and CEO of First Horizon, said, “Our mergerof equals with IBERIABANK is an exciting milestone and the logical next step inthe continued successful transformation of our company. Separately, we are bothformidable organizations with strong track records, great businesses andtalented bankers. Together, First Horizon and IBERIABANK will create a powerfulnew company driven by our shared commitment to our customers, communities,shareholders and the employees we serve. We are pleased to have a partner witha complementary people-focused culture, shared values and a growth-orientedbusiness model. Our combined new scale, deep experience in financial servicesand diverse business mix in the South uniquely position us to accelerate ourgrowth and create lasting shareholder value.”

IBERIABANK President and CEO Daryl Byrd said, “This merger ofequals represents an exciting next chapter for both companies. By joiningforces with First Horizon, we will create an organization that has theresources to invest in advanced technologies and expand lending capacity andproduct offerings for our combined clients. We chose a partner who values deeprelationships and is culturally aligned with our core mission, which is tocreate a great place to work for employees, deliver extraordinary, value-basedclient service, meet the expectations of our shareholders and invest in thecommunities we serve. Our partnership will leverage our best-in-class workforceand build on and complement the well-established strong foundations of bothorganizations. We look forward to bringing our companies together to betterserve our clients and communities.”

Strategic Benefits

Enhanced Scale to Drive Growth –Thecombined company will be a significant player throughout the Southern market,with $75 billion in assets. This combination enhances the combined company’sability to invest in advanced technologies and innovation to strengthen itsbusiness and create a competitive advantage in a dynamic market environment.

Complementary Market Presence – Thecombination strengthens the competitive position in high-growth,demographically attractive Southern markets. The pro forma bank branchfootprint is located in 15 of the Top 20 Southern MSAs by population and in 11states throughout the combined footprint.

Diversified Business Mix – The combined company will have awell-diversified revenue mix with earnings streams from unique lendingcapabilities and distinct fee income businesses across a broader customer base.The combined organization will offer a broader and more comprehensive suite ofproducts and services for commercial, consumer and small businessclients. 

Experienced Combined Management Team with Strong CulturalAlignment – In addition to a strong track record ofsuccessfully executing and integrating multiple large transactions, thecombined management team has significant experience in leading regional banks.Together, First Horizon and IBERIABANK are committed to preserving the strongcultures of both companies to deliver superior client service. 

Financial Benefits

Significant EPS and Earnings Accretion – Thetransaction is projected to deliver approximately 16% EPS accretion to FirstHorizon and approximately 22% EPS accretion to IBERIABANK by year-end 2021.

Substantial Cost Synergies –Thetransaction is expected to deliver approximately $170 million in pre-tax costsynergies, primarily driven by annual run-rate cost savings such asredundancies in overhead, bank branches, operations and computer services.

Peer Leading Profitability – Thecombined company will be well-positioned to achieve peer leading profitabilityand operating metrics.

Industry Leading Operating Metrics – Thefranchise is expected to deliver top-tier operating and return metrics withcost 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, Tenn., andwill maintain a significant operating presence in all of the markets in whichboth companies operate today. The combined company’s regional bankingheadquarters will be located in New Orleans, La.

The combined company will be led by a balanced board and executiveleadership team composed of members from both First Horizon and IBERIABANK.Upon closing of the transaction, the Board of Directors will consist of ninedirectors from First Horizon and eight directors from IBERIABANK. The newcompany will be led by Daryl G. Byrd as Executive Chairman of the Board ofDirectors and D. Bryan Jordan as Chief Executive Officer.

Leadership from First Horizon will be:

  • William C. Losch, III, Chief Financial Officer
  • David Popwell, President, Specialty Banking
  • Susan Springfield, Chief Credit Officer
  • Tammy LoCascio, Chief Human Resources Officer

Leadership from IBERIABANK will be:

  • Anthony Restel, Chief Operating Officer
  • Michael Brown, President, Regional Banking
  • Terry Akins, Chief Risk Officer
  • Beth Ardoin, Chief Communications Officer

Both companies’ longstanding commitments to serve theircommunities will remain central to the combined organization’s future.Collectively, the two companies have committed $10 billion to community benefitplans to increase access to financial resources and support for low andmoderate income communities in the South. The combined bank will continue itsinvestments in these and other important initiatives in the communities inwhich it operates.

Timing and Approvals

The merger is expected to close in the second quarter of 2020,subject to satisfaction of customary closing conditions, including receipt ofcustomary regulatory approvals and approval by the shareholders of each company.

Advisors

Morgan Stanley & Co. LLC is serving as financial advisor andSullivan & Cromwell LLP is serving as legal counsel to First Horizon.Keefe, Bruyette & Woods and Goldman Sachs are serving as financial advisorsand Simpson Thacher & Bartlett LLP is serving as legal counsel toIBERIABANK.

Forward-Looking Statements

This press release 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’s and IBERIABANK’s beliefs,plans, goals, expectations, and estimates. Forward-looking statements are not arepresentation of historical information, but instead pertain to futureoperations, strategies, financial results or other developments. The words“believe,” “expect,” “anticipate,” “intend,” “estimate,” “should,” “is likely,”“will,” “going forward” and other expressions that indicate future events andtrends identify forward-looking statements.

Forward-looking statements are necessarily based upon estimatesand assumptions that are inherently subject to significant business,operational, economic and competitive uncertainties and contingencies, many ofwhich are beyond the control of First Horizon and IBERIABANK, and many ofwhich, with respect to future business decisions and actions, are subject tochange and which could cause actual results to differ materially from thosecontemplated or implied by forward-looking statements or historicalperformance. Examples of uncertainties and contingencies include factorspreviously disclosed in First Horizon’s and IBERIABANK’s respective reportsfiled with the U.S. Securities and Exchange Commission (the “SEC”), as well asthe following factors, among others: the occurrence of any event, change orother circumstances that could give rise to the right of one or both of theparties to terminate the definitive merger agreement between First Horizon andIBERIABANK; the outcome of any legal proceedings that may be instituted againstFirst Horizon or IBERIABANK; the possibility that the proposed transaction willnot close when expected or at all because required regulatory, shareholder orother approvals are not received or other conditions to the closing are notsatisfied on a timely basis or at all, or are obtained subject to conditionsthat are not anticipated; the risk that any announcements relating to theproposed combination could have adverse effects on the market price of the commonstock of either or both parties to the combination; the possibility that theanticipated benefits of the transaction will not be realized when expected orat all, including as a result of the impact of, or problems arising from, theintegration of the two companies or as a result of the strength of the economyand competitive factors in the areas where First Horizon and IBERIABANK dobusiness; certain restrictions during the pendency of the merger that mayimpact the parties’ ability to pursue certain business opportunities orstrategic transactions; the possibility that the transaction may be moreexpensive to complete than anticipated, including as a result of unexpectedfactors or events; diversion of management’s attention from ongoing business operationsand opportunities; potential adverse reactions or changes to business oremployee relationships, including those resulting from the announcement orcompletion of the transaction; First Horizon and IBERIABANK success inexecuting their respective business plans and strategies and managing the risksinvolved in the foregoing; the dilution caused by First Horizon’s issuance ofadditional shares of its capital stock in connection with the proposedtransaction; and other factors that may affect future results of First Horizonand IBERIABANK.

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, 2018, 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.firsthorizon.com, under the heading “SEC Filings” and in other documents First Horizon files with the SEC, and in IBERIABANK’s Annual Report on Form 10-K for the year ended December 31, 2018, and in its subsequent Quarterly Reports on Form 10-Q filed with the SEC and available in the “Investor Relations” section of IBERIABANK’s website, www.iberiabank.com, under the heading “Financials & Filings” and in other documents IBERIABANK files with the SEC. 

Important Other Information

In connection with the proposed transaction, First Horizon willfile with the SEC a registration statement on Form S-4 to register the sharesof First Horizon’s capital stock to be issued in connection with the proposedtransaction. The registration statement will include a joint proxy statement ofFirst Horizon and IBERIABANK which will be sent to the shareholders of FirstHorizon and IBERIABANK seeking their approval of the proposed transaction.

This communication does not constitute an offer to sell or asolicitation of an offer to buy any securities or a solicitation of any vote orapproval. INVESTORS AND SHAREHOLDERS OF FIRST HORIZON AND IBERIABANK ARE URGEDTO READ, WHEN AVAILABLE, THE REGISTRATION STATEMENT ON FORM S-4, THE JOINTPROXY STATEMENT/PROSPECTUS TO BE INCLUDED WITHIN THE REGISTRATION STATEMENT ONFORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC INCONNECTION WITH THE PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS ORSUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATIONABOUT FIRST HORIZON, IBERIABANK AND THE PROPOSED TRANSACTION.

Investors and shareholders will be able to obtain a free copy of the registration statement, including the joint proxy statement/prospectus, as well as other relevant documents filed with the SEC containing information about First Horizon and IBERIABANK, without charge, at the SEC’s website (http://www.sec.gov). Copies of the registration statement, including the joint proxy statement/prospectus, and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Clyde A. Billings Jr., First Horizon, 165 Madison Ave, Memphis, TN 38103, telephone (901) 523-5679, or Jefferson G. Parker, IBERIABANK, 200 West Congress Street, Lafayette, LA 70501, telephone (504) 310-7314.   

Participants in the Solicitation

First Horizon, IBERIABANK and certain of their respectivedirectors, executive officers and employees may be deemed to be participants inthe solicitation of proxies in respect of the proposed transaction under therules of the SEC. Information regarding First Horizon’s directors and executiveofficers is available in its definitive proxy statement, which was filed withthe SEC on March 11, 2019, and certain of its Current Reports on Form 8-K.Information regarding IBERIABANK’s directors and executive officers isavailable in its definitive proxy statement, which was filed with SEC on March28, 2019, and certain of its Current Reports on Form 8-K. Other informationregarding the participants in the solicitation of proxies in respect of theproposed transaction and a description of their direct and indirect interests,by security holdings or otherwise, will be contained in the joint proxystatement/prospectus and other relevant materials to be filed with the SEC. Freecopies of these documents, when available, may be obtained as described in thepreceding paragraph.

About First Horizon

First Horizon National Corp. (NYSE:FHN) provides financial services through First Horizon Bank, First Horizon Advisors, and FHN Financial businesses. The banking subsidiary was founded in 1864 and has the largest deposit market share in Tennessee. The company operates approximately 270 bank locations across the Southeast U.S. and 29 FHN Financial offices across the entire U.S. First Horizon Advisors wealth management group has more than 300 financial professionals and about $4.8 billion in assets under management. FHN Financial is a capital markets industry leader in fixed income sales, trading and strategies for institutional customers in the U.S. and abroad. The company is recognized as one of the nation’s best employers by Fortune and Forbes magazines and a Top 10 Most Reputable U.S. bank. More information is available at www.FirstHorizon.com.

About IBERIABANK Corporation

IBERIABANK Corporation is a financial holding company withlocations in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia,South Carolina, North Carolina, Mississippi, Missouri, and New York offeringcommercial, private banking, consumer, small business, wealth and trustmanagement, retail brokerage, mortgage, and title insurance services. TheCompany’s common stock trades on the NASDAQ Global Select Market under thesymbol “IBKC”. The Company’s Series B Preferred Stock, Series CPreferred Stock, and Series D Preferred Stock also trade on the NASDAQ GlobalSelect Market under the symbols “IBKCP”, “IBKCO”, and“IBKCN”, respectively. The Company’s common stock market capitalizationwas approximately $3.9 billion, based on the closing stock price on November 1,2019.