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Staff photo by C.B. Schmelter / First Horizon Bank, formerly First Tennessee Bank, is seen on Thursday, Oct. 24, 2019 in Chattanooga, Tenn.

This story was updated Wednesday, Nov. 6, 2019, at 3:30 a.m. to identify the original name of First Horizon as First National Bank of Memphis. A previous version incorrectly identified the original name as First Tennessee Bank.

Tennessee's biggest bank is merging with the largest bank based in Louisiana in what officials are billing as a merger of equals that will create one of the biggest banks in the South.

First Horizon National Corp., headquartered n Memphis, and Iberiabank Corp., based in Lafayette, Louisiana, announced Monday they have entered into a definitive agreement for an all-stock deal valued at $31.7 billion — the second biggest U.S. bank deal of 2019.

The combined bank will have $75 billion in combined assets and more than 400 office locations, although some of those branches may be pruned as part of $170 million expected in cost savings from the merger.

Under the terms of the agreement, which was unanimously approved by the boards of both companies, the combined bank will operate under the First Horizon name and will be headquartered in Memphis.

Banks at a glance

Name: Iberiabank

Headquarters: Lafayette, Louisiana, which is moved to in 2003 after being started in Iberia, Louisiana

History: Established in 1887 as a savings and loan, Iberia switched to stock savings bank in 1992 and a commercial bank in 1997

Assets: $31.4 billion

Staff: 3,158 employees

Locations: 191 offices in five states

2018 net income: $370.2 million

Closing stock price Monday: $76.83, up 2.8%

Name: First Horizon

Headquarters: Memphis

History: Established in 1864 in Memphis as First National Bank of Memphis, the bank acquired the failed Hamilton National Bank in Chattanooga in 1977

Assets: $42 billion

Staff: 5,507

Locations: 280 offices in seven states

2018 net income: $545 million

Closing stock price Monday: $16.84, up 3.25%

The deal comes just a week after the former First Tennessee Bank took on the First Horizon name and two years after First Horizon acquired Capital Bank in Charlotte, North Carolina for $2.2 billion to expand its market presence into the Carolinas and Florida.

The combined bank will operate banks in 15 of the top 20 Southern metropolitan areas, including Chattanooga where First Horizon is the biggest bank with nearly $2.4 billion in assets. In asset size, the combined bank will rank as the 7th biggest bank headquartered in the South.

"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 and CEO of First Horizon, said in the announcement of the deal. "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."

After the merger, 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 the deal is completed, based upon each company's current dividend per share.

some text Staff photo by C.B. Schmelter / First Horizon Bank, formerly First Tennessee Bank, is seen on Thursday, Oct. 24, 2019 in Chattanooga, Tenn.

"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 Daryl Byrd, president and CEO of Iberiabank. "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."

First Horizon projects the merger will boost earnings per share by 16% to First Horizon shareholders and will raise earnings per share for Iberiabank stockholders by 22% . The companies said the merger should result in $170 million in pre-tax cost savings, primarily by eliminating redundancies in overhead, bank branches, operations and computer services.

Jordan will remain CEO of the new company and Byrd will become the executive chairman. The merger is anticipated to close in the second quarter of 2020.

First Horizon said it expects to incur $440 million in merger-related expenses, which it said should take the company about two years to earn back. Shares of both First Horizon and IberiaBank rose in trading Monday.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.

Biggest banks in the South

The largest banks, ranked by asset size, which are headquartered in the South are:

1. Bank of America, Charlotte, North Carolina, $2.37 trillion in assets

2. BB&T, Winston-Salem, North Carolina, $227 billion

3. SunTrust, Atlanta, $220 billion

4. USAA, San Antonio, Texas, $165 billion

5. Regions, Birmingham, Ala., $129 billion

6. BBVA USA, Birmingham, Ala., $93 billion

7. First Horizon,* Memphis, $75 billion

8. Synovus, Columbus, Ga., $46 billion

9. Raymond James Financial, St. Petersburg, Fla., $38 billion

10. First Citizens Bancshares, Raleigh, North Carolina, $35 billion

* With the merger of First Horizon and IberiaBank

Source: Federal Deposit Insurance Corp., assets as of June 30, 2019

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