First Horizon National Corp. (NYSE:FHN) and Capital Bank Financial
Corp. (NASDAQ:CBF) have entered into a definitive agreement that
will create the fourth largest regional bank in the
Southeast. Under the agreement First Horizon, which has $30
billion in assets, will acquire Capital Bank, which has $10 billion
in assets. First Horizon operates 170 branches across
Tennessee and the Southeast, and Capital Bank operates 193 branches
in the Carolinas, Tennessee, Florida and Virginia. The merger
will accelerate First Horizon’s strategic plan to enhance its
presence in fast-growing markets in the Southeast.
The combined organization will have $40 billion in assets, $32
billion in deposits, $27 billion in loans and more than 300
branches in Tennessee, North Carolina, South Carolina, Florida,
Mississippi, Georgia, Texas and Virginia. First Horizon,
which is headquartered in Memphis, Tenn., will retain its First
Tennessee bank brand in Tennessee, where it has a 153-year
history. Branches outside Tennessee will use the Capital Bank
name.
Under the agreement, each holder of Capital Bank common stock
will be entitled to receive cash or stock with a value equivalent
to 1.750 First Horizon shares and $7.90 in cash for each Capital
Bank share held, subject to the election allocation and proration
provisions of the merger agreement. In the aggregate, Capital
Bank shareholders will receive a mix of approximately 80 percent
stock and 20 percent cash. After closing, Capital Bank shareholders
collectively will own approximately 29 percent of First Horizon’s
common shares and will have received approximately $411 million in
cash. The total transaction value, at yesterday’s First Horizon
closing stock price, is $2.2 billion.
“This is an exciting time for First Horizon,” said Bryan Jordan,
chairman and CEO of First Horizon. “Together with the accomplished
team at Capital Bank we will be able to leverage the strengths of
both banks and capitalize on growth opportunities in attractive,
high-growth Southeast markets and enhance our strong presence in
our Tennessee markets. This partnership will help us more quickly
achieve our critical bonefish financial targets. We look forward to
working with the talented people of Capital Bank to combine the
best of both of our organizations.”
The agreement calls for two members of Capital Bank’s board of
directors to join the First Horizon board, including Gene Taylor,
Capital Bank chairman and CEO, who will become vice chairman of
First Horizon.
Taylor said, “The merger with First Horizon will allow us to
sustain the success Capital Bank has achieved and create new
opportunities for growth. The strategic fit between the two
organizations is compelling, especially for our valued customers
who will benefit from the enhanced balance sheet strength and
broader array of products and services offered by a $40 billion
Southeastern bank. I am looking forward to joining the board
of First Horizon and am confident our combined company will reflect
the values and talent of both organizations.”
Both companies’ long-standing commitment to serve their
communities will remain vital to the combined organization’s
future. Since 1993 the First Tennessee Foundation has granted
more than $65 million to nonprofit organizations. Together,
in 2016 the combined companies provided $965 million in lending and
investment activities to support low- to moderate-income
communities. First Tennessee’s Community Development Fund
will be expanded by $15 million to support nonprofit and community
development efforts in new markets.
The merger agreement has been approved by the boards of both
companies. Closing is subject to customary approvals by
regulators and shareholders of both companies. Pending those
approvals, the transaction is expected to close in the fourth
quarter.
Barclays Capital Inc. and Morgan Stanley & Co. LLC served as
financial advisors to First Horizon, and Sullivan & Cromwell
LLP served as First Horizon’s legal advisor. Sandler O’Neill
+ Partners L.P. and UBS Investment Bank served as financial
advisors to Capital Bank, and Wachtell, Lipton, Rosen & Katz
served as Capital Bank’s legal advisor.
Joint Investor Conference CallFirst Horizon and
Capital Bank will hold a joint conference call to discuss the
transaction at 8:30 a.m. Central/9:30 a.m. Eastern today. The
dial-in number is (844)329-0537, and the conference i.d. is
18930478. Investor materials will be posted before the call
in the investor relations section of www.FirstHorizon.com.
Participants can listen to the live audio webcast with the
accompanying slide presentation through the investor relations
section of www.FirstHorizon.com.
A replay will be available from noon Central time today until
11:00 p.m. Central on June 5. To listen to the replay, dial
(855)859-2056 and use conference i.d. 18930478. The event
also will be archived in the events and presentations section
of http://ir.fhnc.com.
Forward-Looking StatementsThis press release
contains certain “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995 with respect
to our beliefs, plans, goals, expectations, and estimates.
Forward-looking statements are not a representation of historical
information, but instead pertain to future operations, strategies,
financial results or other developments. The words “believe,”
“expect,” “anticipate,” “intend,” “estimate,” “should,” “is
likely,” “will,” “going forward” and other expressions that
indicate future events and trends identify forward-looking
statements.
Forward-looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant
business, operational, economic and competitive uncertainties and
contingencies, many of which are beyond the control of First
Horizon and Capital Bank, and many of which, with respect to future
business decisions and actions, are subject to change. Examples of
uncertainties and contingencies include, among other important
factors: global, general, and local economic and business
conditions, including economic recession or depression;
expectations of and actual timing and amount of interest rate
movements, including the slope and shape of the yield curve, which
can have a significant impact on a financial services institution;
market and monetary fluctuations, including fluctuations in
mortgage markets; inflation or deflation; customer, investor,
competitor, regulatory, and legislative responses to any or all of
these conditions; demand for First Horizon’s and Capital Bank’s
product offerings; the actions of the Securities and Exchange
Commission (SEC), the Financial Accounting Standards Board (FASB),
the Office of the Comptroller of the Currency (OCC), the Board of
Governors of the Federal Reserve System (Federal Reserve), the
Federal Deposit Insurance Corporation (FDIC), the Financial
Industry Regulatory Authority (FINRA), the U.S. Department of the
Treasury (Treasury), the Municipal Securities Rulemaking Board
(MSRB), the Consumer Financial Protection Bureau (CFPB), the
Financial Stability Oversight Council (Council), the Public Company
Accounting Oversight Board (PCAOB), and other regulators and
agencies, including in connection with the regulatory approval
process associated with the merger; pending, threatened, or
possible future regulatory, administrative, and judicial outcomes,
actions, and proceedings; current or future Executive orders;
changes in laws and regulations applicable to First Horizon and
Capital Bank; the possibility that the proposed transaction will
not close when expected or at all because required regulatory,
shareholder or other approvals are not received or other conditions
to the closing are not satisfied on a timely basis or at all; the
possibility that the anticipated benefits of the transaction will
not be realized when expected or at all, including as a result of
the impact of, or problems arising from, the integration of the two
companies or as a result of the strength of the economy and
competitive factors in the areas where First Horizon and Capital
Bank do business; the possibility that the transaction may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; diversion of management’s attention
from ongoing business operations and opportunities; potential
adverse reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of
the transaction; First Horizon’s and Capital Bank’s success in
executing their respective business plans and strategies and
managing the risks involved in the foregoing; and other factors
that may affect future results of First Horizon and Capital
Bank.
Additional factors that could cause results to differ materially
from those contemplated by forward-looking statements can be found
in First Horizon’s Annual Report on Form 10-K for the year ended
December 31, 2016, and in its subsequent Quarterly Reports on Form
10-Q filed with the SEC and available in the “Investor Relations”
section of First Horizon’s website, http://www.firsthorizon.com,
under the heading “SEC Filings” and in other documents First
Horizon files with the SEC, and in Capital Bank’s Annual Report on
Form 10-K for the year ended December 31, 2016, and in its
subsequent Quarterly Reports on Form 10-Q, including for the
quarter ended March 31, 2017, filed with the SEC and available in
the “Investor Relations” section of Capital Bank’s website,
www.CapitalBank-US.com, under the heading “Financials &
Filings” and in other documents Capital Bank files with the
SEC.
Important Other InformationIn connection with
the proposed transaction, First Horizon will file with the SEC a
Registration Statement on Form S-4 that will include a Joint Proxy
Statement of First Horizon and Capital Bank and a Prospectus of
First Horizon, as well as other relevant documents concerning the
proposed transaction. The proposed transaction involving First
Horizon and Capital Bank will be submitted to First Horizon’s
shareholders and Capital Bank’s stockholders for their
consideration. This communication does not constitute an offer to
sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. SHAREHOLDERS OF FIRST HORIZON
AND STOCKHOLDERS OF CAPITAL BANK ARE URGED TO READ THE REGISTRATION
STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE
TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Shareholders will be able to obtain a free copy of the
definitive joint proxy statement/prospectus, as well as other
filings containing information about First Horizon and Capital
Bank, without charge, at the SEC’s website (http://www.sec.gov).
Copies of the joint proxy statement/prospectus and the filings with
the SEC that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by
directing a request to Clyde A. Billings Jr., First Horizon
National Corporation, 165 Madison, 8th Floor, Memphis, TN 38103,
telephone (901)523-5679, or Kenneth A. Posner, Capital Bank
Financial Corp, 1345 Avenue of the Americas, Suite 2-087, New York,
NY 10105, telephone (212)399-4020.
Participants in the SolicitationFirst Horizon,
Capital Bank and certain of their respective directors, executive
officers and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding First Horizon’s directors and executive
officers is available in its definitive proxy statement, which was
filed with the SEC on March 13, 2017, and certain of its Current
Reports on Form 8-K. Information regarding Capital Bank’s directors
and executive officers is available in its definitive proxy
statement, which was filed with SEC on April 28, 2017, and certain
of its Current Reports on Form 8-K. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials filed with the SEC. Free copies of this document
may be obtained as described in the preceding paragraph.
About First HorizonThe 4,300 employees of First
Horizon National Corp. (NYSE:FHN) provide financial services
through 170 First Tennessee Bank branches across Tennessee and the
Southeast and 28 FTN Financial offices across the U.S. The company
was founded during the Civil War in 1864 and has the 14th oldest
national bank charter in the country. First Horizon has the largest
deposit market share in Tennessee and one of the highest customer
retention rates of any bank in the country. FTN Financial is a
capital markets industry leader in fixed income sales, trading and
strategies for institutional customers in the U.S. and abroad. The
First Tennessee Foundation and First Tennessee’s Community
Development Fund provide $8 million each year to support nonprofit
and community development organizations. First Horizon has
been recognized as one of the nation's best employers by Working
Mother and American Banker magazines and the National Association
for Female Executives. The company has also earned national honors
as a champion of diversity and a leader in technology
innovation. More information is available at
www.FirstHorizon.com.
About Capital BankCapital Bank Financial Corp.
(NASDAQ:CBF) is a bank holding company formed in 2009 to create a
premier regional banking franchise in the Southeast. Capital Bank
Financial Corp. is the parent company of Capital Bank Corp., a
North Carolina-chartered financial institution with $10.1 billion
in assets and 193 full-service banking offices in Florida, North
and South Carolina and Tennessee. More information is available at
www.CapitalBank-US.com.
FHN-G
Contacts
First Horizon
Investor Relations Aarti Bowman (901) 523-4017 AAGoorha@FirstHorizon.com
Media Relations Kim Cherry (901) 523-4380 KCherry@FirstHorizon.com
Capital Bank
Investor Relations Kenneth A. Posner (212) 399-4020 KPosner@CBFCorp.com
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