New Bank Flag on the Horizon for Arkansas

What do you get when you combine the 43rd-largest banking franchise in America with the 56th-largest?

In the case of First Horizon Bank of Memphis and IberiaBank of Lafayette, Louisiana, you will get the 33rd-largest at $74 billion in total assets and the marriage of two 100-plus-year-old lenders.

Valued at $3.9 billion when announced in November, the merger will bring the First Horizon name to Arkansas with the addition of IberiaBank’s 16-branch network in the state.

Those IberiaBank offices represent the amalgamation of three franchises and the winnowing of 41 locations acquired in central, northeast and northwest Arkansas during 2007-08.

IberiaBank purchased Little Rock’s Pulaski Bank & Trust for $130 million and Jonesboro’s First Community Bank for $76.3 million in 2007. The tandem deals marked its first foray outside Louisiana.

Nine branches of Bentonville’s failed ANB Financial franchise were added in 2008. Only four of those locations survived the pruning by IberiaBank over the years.

First Community’s 21 locations were slashed to six as were Pulaski Bank’s 11 central Arkansas branches.

Even after those cuts, Arkansas ranked as the third-largest network in IberiaBank’s nine-state footprint. The only two bigger were its full-service branch count in Florida, 69, and Louisiana, 62.

When announced on Nov. 4, the sale of IberiaBank carried a price-to-book-value multiple of 1.37. That valuation is tied to a stock swap of 4.584 shares of First Horizon for each IberiaBank share.

Since then, each lender’s stock price was clipped by the market downturn. First Horizon fell by 19% from $16.50 per share to $13.33, and IberiaBank dropped by 21.9% from $76.83 per share to $60.

Thirteen years ago, IberiaBank’s purchase of the $493 million-asset Pulaski Bank & Trust weighed in at 3.2 times book. The deal for the $733 million-asset First Community stood at 1.5 times book.

First Horizon was founded as First National Bank of Memphis in 1864 and renamed First Tennessee in 1977. The First Tennessee moniker stuck until its recasting as First Horizon in October. IberiaBank was established as Iberia Building Association in 1887.

IberiaBank, Lafayette, La.
Total Assets: $31.6 billion
Net Income: $389.6 million
Efficiency Ratio: 53.18%
Staff: 3,148
16 full-service Arkansas locations: Four in Little Rock, three in Jonesboro and one each in Bentonville, Bryant, Fayetteville, North Little Rock, Newport, Pocahontas, Rogers, Springdale and Walnut Ridge
(As of Dec. 31, 2019)

All dollars in millions except where noted.
Source: Federal Deposit Insurance Corp.