UPDATE: June 16, 2020: First Horizon and IberiaBank have received regulatory approval for their merger, which is expected to close July 1, the banks announced Monday.
Memphis, Tennessee-based First Horizon announced plans to acquire Lafayette, Louisiana-based IberiaBank in a $3.9 billion, all-stock deal Monday. The combined holding company and bank will operate under the First Horizon name and will be headquartered in Memphis.
The combined financial institution would have $75 billion in assets, $57 billion in deposits and $55 billion in loans, according to a release.
The banks said the deal, which is expected to close in the first quarter of 2020, would make First Horizon one of the largest banks in the South and one of the top 25 banks in the country.
The announcement comes less than two weeks after First Tennessee Bank rebranded under the First Horizon name.
Under the terms of the deal, which is still subject to regulatory and shareholder approval, IberiaBank shareholders will receive 4.584 shares of First Horizon for each IberiaBank share they own.
First Horizon shareholders will own 56% of the combined entity,and IberiaBank shareholders will own 44%.
First Horizon's market capitalization was $5.08 billion, and IberiaBank's market cap was $3.94 billion as of Friday's stock closing prices.
First Horizon Chairman and CEO Bryan Jordan will become CEO of the combined entity; IberiaBank President and CEO Daryl Byrd will become the bank's chairman.
The combined bank's board of directors will consist of nine directors from First Horizon and eight from IberiaBank.
The "merger of equals" will allow the banks to make significant investments in technology, executives said during a call with analysts following the announcement.
"If you think about the cascading of bringing these two systems together, certainly there is an ability to have some of that money go toward part of the cost saves. But there is also a healthy amount of money we can throw at improving systems," said Anthony Restel, chief financial officer of IberiaBank, who will become the combined bank's chief operations officer. "From a technology perspective, this should enable us to propel forward on the technology side way faster than we could do on an individual basis."
On the call, Jordan and Byrd said they anticipate the merger will result in annual cost savings of about 9%, a metric they said was fairly conservative, since the merger won't result in major branch overlap.
"We have a very limited branch overlap, so our branch consolidations are likely to be fairly small in number. That impacts the number at least initially," Jordan said. "We think there are great opportunities to achieve savings with the combination, not only create value by synergy. But we also have the ability to create a lot of revenue synergy by leveraging these additional capabilities."
IberiaBank has branches in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, South Carolina, North Carolina, Mississippi, Missouri and New York.
First Horizon operates approximately 270 bank locations across the Southeast U.S.