Iberiabank merger -
First Horizon and IberiaBank to merge
In one of 2019’s biggest bank mergers, IberiaBank Corp. will combine with First Horizon National Corp. in a deal announced Monday that is valued at $3.9 billion.
IberiaBank, which operates the 13th largest bank by deposits in the Sarasota-Manatee region, will join with First Horizon to create a top 25 U.S. bank.
In the all-stock transaction, First Horizon shareholders will own 56% and IberiaBank stockholders will own 44% of the combined company, which will be called First Horizon.
Like the pending BB&T-SunTrust marriage, this marks the latest move by regional banks to bulk up in size to survive in an increasingly challenging industry.
"This merger of equals represents an exciting next chapter for both companies,“ said IberiaBank president/CEO Daryl Byrd. ”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.“
IberiaBank operates six branches with $504.4 million in deposits in the Sarasota-Manatee region, a 2.30% market share, according to mid-year data from the Federal Deposit Insurance Corp.
First Horizon, under its First Tennessee Bank brand, has three local offices with $170.1 million in deposits, a 0.77% share.
IberiaBank, based in Lafayette, Louisiana, came to Southwest Florida in 2009 when it acquired two failed lenders, Century Bank of Sarasota and Orion Bank of Naples. Two years ago it paid $1 billion for Sabadell United Bank of Miami, which operated a Sarasota branch.
First Horizon entered the region in 2017 as part of the $2.2 billion purchase of Capital Bank, which operated offices in Venice and Nokomis. The bank planned to rename those offices from First Tennessee to First Horizon this year.
Analyst Michael Rose of Raymond James called the deal a “win” for the companies.
“As market chatter had pegged IberiaBank as potentially in play and First Horizon as a potential acquirer following BB&T's announced acquisition of SunTrust earlier this year, the merger of equals isn't entirely surprising and in support of our view that we are likely to see several larger M&A transactions announced per year,” he said.
“The deal, which is essentially no premium to IberiaBank’s closing price of $74.76 on Friday and 100% stock-based, is a byproduct of the challenging operating and interest rate backdrop, in our view, where increased scale and a focus on technology have and will continue to drive consolidation of the industry,” Rose said.
The combined bank will report $75 billion in assets, $57 billion in deposits and $55 billion in loans. The headquarters will remain at First Horizon in Memphis, Tennessee.
In Florida, IberiaBank has 69 offices and $9.47 billion in deposits, while First Horizon has 30 branches and $1.89 billion in deposits, the FDIC reports.
"Our merger of equals with IberiaBank is an exciting milestone and the logical next step in the continued successful transformation of our company,“ Bryan Jordan, chairman/CEO at First Horizon, said in a statement. ”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.”
Under the merger agreement, IberiaBank shareholders will receive 4.584 shares of First Horizon stock for each share they own, plus a 43% increase in their dividend.
Pending regulatory and shareholder approvals, the banks hope to close the merger in second-quarter 2020. Byrd will serve as executive chairman of the board, and Jordan will be CEO.
First Horizon, Iberiabank announce $9 billion ‘merger of equals’
Calling it a “merger of equals,” First Horizon National Corp. of Memphis and Lafayette, La.-based Iberiabank Corp. announced an all-stock deal valued at $9 billion ahead of Monday’s (Nov. 4) opening bell that will combine the operations of both banks to create a regional financial colossus with $75 billion in assets, $57 billion in deposits, and $55 billion in loans.
Under terms of the agreement, which was unanimously approved by the boards of both companies, the combined holding company and bank will operate under the First Horizon name and will be headquartered in Memphis, Tenn.
Iberiabank operates with 16 branches in 11 different cities and towns in the state of Arkansas, including locations in the Little Rock market. The bank also has 172 more offices in eight states. Although First Horizon has no physical locations in Arkansas, the Memphis-based regional bank that operates under the First Horizon and First Tennessee Bank brand does offer insurance through local agents.
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.
Under the merger terms, Iberiabank shareholders will receive 4.584 shares of First Horizon for each share of company stock they own. First Horizon shareholders will own 56% and Iberia 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.
As of Friday’s stock closing prices, First Horizon had a market capitalization of $5.08 billion and Iberiabank’s market cap was $3.94 billion.
“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. 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,” said First Horizon Chairman and CEO Bryan Jordan. “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.”
Added Iberiabank President and CEO Daryl Byrd: “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.”
“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,” continued Byrd. “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.”