First Horizon National Corp. of Memphis will purchase IberiaBank Corp. of Lafayette, Louisiana, in a deal that would form a company with $75 billion in assets.
Under terms of the deal 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. First Horizon (NYSE: FHN), formerly known as First Tennessee Bank, changed its name on Oct. 25.
Once the deal is completed, the combined company will be one of the largest financial services companies in the South and one of the top 25 banks in the U.S. in deposits, according to a news release. It will have $75 billion in assets, $57 billion in deposits and $55 billion in loans.
The deal would be valued at about $3.9 billion based on First Horizon's stock closing price on Friday and other factors, according to American Banker.
IberiaBank (Nasdaq: IBKC) 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.
In addition, IberiaBank shareholders will receive a 43% increase in their dividend after the transaction closes, 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," Bryan Jordan, chairman and CEO of First Horizon, said in a news release. "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."
IberiaBank President and CEO Daryl Byrd will join the combined firm as executive chairman.
"This merger of equals represents an exciting next chapter for both companies," Byrd said. "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 expanded into Arkansas with deals that included its purchases of Pocahontas Bancorp Inc. of Jonesboro, the holding company for First Community Bank of Jonesboro, and Pulaski Investment Corp., the holding company for Pulaski Bank and Trust of Little Rock, both in 2006.