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Section 1: 424B3

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Filed pursuant to rule 424(b)(3)
Registration Statement No. 333-235757

 

 

 

 

To the shareholders of First Horizon National Corporation and IBERIABANK Corporation

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

On November 3, 2019, First Horizon National Corporation (“First Horizon”) and IBERIABANK Corporation (“IBKC”) entered into an Agreement and Plan of Merger (as amended from time to time, the “merger agreement”), pursuant to which First Horizon and IBKC have agreed to combine their respective businesses in a merger of equals. Under the merger agreement, IBKC will merge with and into First Horizon (the “merger”), with First Horizon as the surviving entity (the “combined company” or “First Horizon,” as the case may be). Following the completion of the merger, IBERIABANK, a subsidiary of IBKC, will merge with and into First Horizon Bank, a subsidiary of First Horizon, with First Horizon Bank as the surviving bank (the “bank merger”). The merger will bring together two companies with complementary franchises to create one of the largest financial services companies headquartered in the South and one of the top 25 banks in the United States based on deposits.

In the merger, holders of IBKC common stock will receive 4.584 shares (the “exchange ratio” and such shares, the “merger consideration”) of First Horizon common stock for each share of IBKC common stock they own. Holders of First Horizon common stock will continue to own their existing shares of First Horizon common stock. Based on the closing price of First Horizon’s common stock on the New York Stock Exchange (“NYSE”) on November 1, 2019, the last trading day before public announcement of the merger, the exchange ratio represented approximately $74.76 in value for each share of IBKC common stock, representing merger consideration of approximately $3.9 billion on an aggregate basis. Based on First Horizon’s closing price on March 18, 2020 of $7.18, the exchange ratio represented approximately $32.91 in value for each share of IBKC common stock, representing merger consideration of approximately $1.7 billion on an aggregate basis. The value of the First Horizon common stock at the time of completion of the merger could be greater than, less than or the same as the value of First Horizon common stock on the date of the accompanying joint proxy statement/prospectus. We urge you to obtain current market quotations of First Horizon common stock (trading symbol “FHN”) and IBKC common stock (trading symbol “IBKC”).

In addition, each share of IBKC preferred stock issued and outstanding immediately prior to the effective time will be converted into the right to receive one (1) share of an applicable newly issued series of rollover First Horizon preferred stock with terms that are the same as the terms of the applicable series of outstanding IBKC preferred stock. Likewise, following the completion of the merger, each outstanding IBKC depositary share representing a 1/400th interest in a share of the applicable series of IBKC preferred stock will become a First Horizon depositary share and will represent a 1/400th interest in a share of the applicable series of rollover First Horizon preferred stock. The IBKC depositary shares representing a 1/400th interest in a share of IBKC series B preferred stock, IBKC series C preferred stock and IBKC series D preferred stock are currently listed on The NASDAQ Stock Market LLC under the symbol “IBKCP,” “IBKCO,” and “IBKCN,” respectively. The First Horizon depositary shares representing a 1/400th interest in a share of rollover First Horizon series B preferred stock, First Horizon series C preferred stock and First Horizon series D preferred stock are expected to be listed on the NYSE upon completion of the merger.

We expect the merger will qualify as a reorganization for federal income tax purposes. Accordingly, holders of IBKC common stock or IBKC preferred stock generally will not recognize any gain or loss for federal income tax purposes on the exchange of shares of IBKC common stock or IBKC preferred stock, as applicable, for First Horizon common stock or rollover First Horizon preferred stock, as applicable, in the merger, except with respect to any cash received by such holders.

Based on the current number of shares of IBKC common stock outstanding or reserved for issuance, First Horizon expects to issue approximately 244 million shares of First Horizon common stock to holders of IBKC common stock in the aggregate in the merger. Following the completion of the merger, we estimate that former holders of IBKC common stock will own approximately 44% and former holders of First Horizon common stock will own approximately 56% of the common stock of the combined company. At the effective time, each outstanding IBKC depositary share (other than IBKC depositary shares in respect of dissenting shares of IBKC preferred stock) will become a rollover First Horizon depositary share and


 

will represent a 1/400th interest in a share of the applicable series of rollover First Horizon preferred stock, which will have terms that are the same as the terms of the applicable series of outstanding IBKC preferred stock. At the effective time, there will be 3,200,000 depositary shares of newly created First Horizon series B preferred stock (each representing an 1/400 interest in one (1) of the 8,000 newly created underlying shares of First Horizon series B preferred stock), 2,300,000 depositary shares of newly created First Horizon series C preferred stock (each representing an 1/400 interest in one (1) of the 5,750 newly created underlying shares of First Horizon series C preferred stock) and 4,000,000 depositary shares of newly created First Horizon series D preferred stock (each representing an 1/400 interest in one (1) of the 10,000 newly created underlying shares of First Horizon series D preferred stock).

First Horizon and IBKC will each hold a special meeting of our respective shareholders in connection with the merger. At our respective special meetings, in addition to other business, First Horizon will ask holders of its common stock and IBKC will ask holders of its common stock to approve the merger. Information about these meetings and the merger is contained in this document. In particular, see “Risk Factors” beginning on page 43. We urge you to read this document carefully and in its entirety.

Holders of IBKC preferred stock and holders of depositary shares representing interests in the shares of the applicable series of IBKC preferred stock are not entitled to and are not requested to vote at the IBKC special meeting. Holders of First Horizon preferred stock and holders of depositary shares representing interests in the shares of First Horizon preferred stock are not entitled to and are not requested to vote at the First Horizon special meeting.

The special meeting of holders of IBKC common stock will be held on April 24, 2020 at IBERIABANK, 601 Poydras Street, 20th Floor, New Orleans, Louisiana 70130, at 10:00 AM, local time. The special meeting of holders of First Horizon common stock will be held on April 24, 2020 at First Horizon Building M-Level Auditorium 165 Madison Avenue Memphis, TN 38103, at 10:00 AM, local time.

Whether or not you plan to attend your special meeting, please vote as soon as possible to make sure that your shares are represented at the meeting. If you do not vote your shares of common stock, it will have the same effect as voting “AGAINST” the merger.

Each of our boards of directors unanimously recommends that holders of common stock vote “FOR” each of the proposals to be considered at the respective meetings. We strongly support this combination of our companies and join our boards in their recommendations.

This joint proxy statement/prospectus provides you with detailed information about the merger agreement and the merger. It also contains or references information about First Horizon and IBKC and certain related matters. You are encouraged to read this joint proxy statement/prospectus carefully. In particular, you should read the “Risk Factors” section beginning on page 43 for a discussion of the risks you should consider in evaluating the proposed merger and how it will affect you. You can also obtain information about First Horizon and IBKC from documents that have been filed with the Securities and Exchange Commission that are incorporated into this joint proxy statement/prospectus by reference.

 

 

 

 

D. Bryan Jordan
Chairman of the Board,
President and Chief Executive Officer

First Horizon National Corporation

 

Daryl G. Byrd
President and Chief Executive Officer

IBERIABANK Corporation

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or determined if this document is accurate or complete. Any representation to the contrary is a criminal offense.

The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either First Horizon or IBKC, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The accompanying joint proxy statement/prospectus is dated March 19, 2020, and is first being mailed to holders of First Horizon common stock and First Horizon preferred stock and holders of IBKC common stock and IBKC preferred stock on or about March 25, 2020.


 

ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates important business and financial information about First Horizon and IBKC from other documents that are not included in or delivered with this document. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this document through the Securities and Exchange Commission website at http://www.sec.gov or by requesting them in writing, by e-mail or by telephone at the appropriate address below:

 

 

 

if you are a First Horizon shareholder:
First Horizon National Corporation

165 Madison Avenue
Memphis, Tennessee 38103
Attn: Clyde A. Billings, Jr.
(901) 523-4444

 

if you are a IBKC shareholder:
IBERIABANK Corporation

200 West Congress Street
Lafayette, Louisiana 70501
Attn: Robert B. Worley, Jr., Secretary
(337) 521-4003

You will not be charged for any of these documents that you request. To obtain timely delivery of these documents, you must request them no later than five (5) business days before the date of the applicable special meeting. This means that holders of First Horizon common stock requesting documents must do so by April 17, 2020, in order to receive them before the First Horizon special meeting, and holders of IBKC common stock requesting documents must do so by April 17, 2020, in order to receive them before the IBKC special meeting.

No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated March 19, 2020, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such incorporated document. Neither the mailing of this document to holders of First Horizon common stock or holders of IBKC common stock, nor the issuance by First Horizon of shares of First Horizon common stock or First Horizon preferred stock in connection with the merger will create any implication to the contrary.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in, or incorporated by reference into, this document regarding IBKC has been provided by IBKC and information contained in, or incorporated by reference into, this document regarding First Horizon has been provided by First Horizon.

See “Where You Can Find More Information” beginning on page 222 of the accompanying joint proxy statement/prospectus for further information.


 

First Horizon National Corporation
165 Madison Avenue
Memphis, Tennessee 38103

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To First Horizon Shareholders:

On November 3, 2019, First Horizon National Corporation (“First Horizon”) and IBERIABANK Corporation (“IBKC”) entered into an Agreement and Plan of Merger (as amended from time to time, the “merger agreement”), a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus.

NOTICE IS HEREBY GIVEN that a special meeting of holders of First Horizon common stock (the “First Horizon special meeting”) will be held on April 24, 2020 at 10:00 AM, local time at First Horizon Building M-Level Auditorium 165 Madison Avenue Memphis, TN 38103. We are pleased to notify you of and invite you to the First Horizon special meeting.

At the First Horizon special meeting you will be asked to vote on the following matters:

 

 

Proposal to approve the merger agreement (the “First Horizon merger proposal”).

 

 

Proposal to approve the amendment of the restated charter of First Horizon (the “First Horizon charter”) to effect an increase in the number of authorized shares of First Horizon common stock from 400,000,000 to 700,000,000 (the “First Horizon charter amendment proposal”).

 

 

Proposal to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by First Horizon to its named executive officers in connection with the merger (the “First Horizon compensation proposal”).

 

 

Proposal to adjourn the First Horizon special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the First Horizon merger proposal and/or the First Horizon charter amendment proposal, or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to holders of First Horizon common stock (the “First Horizon adjournment proposal”).

The board of directors of First Horizon has fixed the close of business on February 24, 2020 as the record date for the First Horizon special meeting. Only holders of record of First Horizon common stock and First Horizon preferred stock as of the close of business on the record date for the First Horizon special meeting are entitled to notice of the First Horizon special meeting or any adjournment or postponement thereof. Only holders of record of First Horizon common stock will be entitled to vote at the First Horizon special meeting or any adjournment or postponement thereof.

First Horizon has determined that holders of First Horizon common stock are not entitled to dissenters’ rights with respect to the proposed merger under Title 48 of Chapter 23 of the Tennessee Business Corporation Act.

The First Horizon board of directors unanimously recommends that holders of First Horizon common stock vote “FOR” the First Horizon merger proposal, “FOR” the First Horizon charter amendment proposal, “FOR” the First Horizon compensation proposal and “FOR” the First Horizon adjournment proposal.

Your vote is important. We cannot complete the transactions contemplated by the merger agreement unless holders of First Horizon common stock approve the merger agreement and the First Horizon charter amendment proposal. The affirmative vote of a majority of all the votes entitled to be cast on the merger agreement by the holders of First Horizon common stock is required to approve the First Horizon merger proposal. The affirmative vote of a majority of the votes cast on the First Horizon charter


 

amendment proposal by the holders of First Horizon common stock is required to approve the First Horizon charter amendment proposal.

Whether or not you plan to attend the First Horizon special meeting, we urge you to please promptly complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope or authorize the individuals named on the accompanying proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with the accompanying proxy card. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by such bank, broker or other nominee.

By Order of the Board of Directors

D. Bryan Jordan
Chairman of the Board,
President and Chief Executive Officer

March 19, 2020


 

IBERIABANK Corporation
200 West Congress Street
Lafayette, Louisiana 70501

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To IBKC Shareholders:

On November 3, 2019, First Horizon National Corporation (“First Horizon”) and IBERIABANK Corporation (“IBKC”) entered into an Agreement and Plan of Merger (as amended from time to time, the “merger agreement”), a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus.

NOTICE IS HEREBY GIVEN that a special meeting of holders of IBKC common stock (the “IBKC special meeting”) will be held on April 24, 2020 at 10:00 AM, local time at IBERIABANK, 601 Poydras Street, 20th Floor, New Orleans, Louisiana 70130. We are pleased to notify you of and invite you to the IBKC special meeting.

At the IBKC special meeting, holders of IBKC common stock will be asked to vote on the following matters:

 

 

Proposal to approve the merger agreement (the “IBKC merger proposal”).

 

 

Proposal to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by IBKC to its named executive officers in connection with the merger (the “IBKC compensation proposal”).

 

 

Proposal to adjourn the IBKC special meeting, if necessary or appropriate, to solicit additional proxies if, immediately prior to such adjournment, there are not sufficient votes to approve the IBKC merger proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to holders of IBKC common stock (the “IBKC adjournment proposal”).

The board of directors of IBKC has fixed the close of business on February 24, 2020 as the record date for the IBKC special meeting. Only holders of record of IBKC common stock and IBKC preferred stock as of the close of business on the record date for the IBKC special meeting are entitled to notice of the IBKC special meeting or any adjournment or postponement thereof. Only holders of record of IBKC common stock will be entitled to vote at the IBKC special meeting or any adjournment or postponement thereof.

IBKC has determined that holders of IBKC common stock are not entitled to appraisal rights with respect to the proposed merger under Section 12:1-1302 of the Louisiana Business Corporation Act (“LBCA”).

Holders of IBKC preferred stock are entitled to exercise appraisal rights in connection with the merger, provided the proper procedures of Part 13 of the LBCA are followed. A copy of Part 13 of the LBCA is attached as Annex E to the accompanying joint proxy statement/prospectus.

Holders of IBKC preferred stock have appraisal rights under the LBCA in connection with the proposed merger. Because appraisal rights are available to preferred shareholders, the following notice of such rights is required under Part 13 of the LBCA:

Appraisal rights allow a shareholder to avoid the effects of the proposed corporate action described in this notice by selling the shareholder’s shares to the corporation at their fair value, paid in cash. To retain the right to assert appraisal rights, a shareholder is required by law: (1) to deliver to the corporation, before the vote is taken on the action described in this notice, a written notice of the shareholder’s intent to demand appraisal if the corporate action proposed in this notice takes effect, and (2) not to vote, or cause or permit to be voted, in favor of the proposed corporate action any shares of the class or series for which the shareholder intends to assert appraisal rights. If a shareholder complies with those


 

requirements, and the action proposed in this notice takes effect, the law requires the corporation to send to the shareholder an appraisal form that the shareholder must complete and return, and a copy of Part 13 of the Business Corporation Act, governing appraisal rights.

The IBKC board of directors unanimously recommends that holders of IBKC common stock vote “FOR” the IBKC merger proposal, “FOR” the IBKC compensation proposal and “FOR” the IBKC adjournment proposal.

Your vote is important. We cannot complete the transactions contemplated by the merger agreement unless holders of IBKC common stock approve the merger agreement. The affirmative vote of a majority of all the votes entitled to be cast on the merger agreement by the holders of IBKC common stock is required to approve the IBKC merger proposal.

Whether or not you plan to attend the IBKC special meeting, we urge you to please promptly complete, sign, date and return the accompanying proxy card in the enclosed postage-paid envelope or authorize the individuals named on the accompanying proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with the accompanying proxy card. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by such bank, broker or other nominee.

By Order of the Board of Directors

Daryl G. Byrd
President and Chief Executive Officer

March 19, 2020


 

TABLE OF CONTENTS

 

 

 

 

 

Page

TABLE OF CONTENTS

 

 

 

i

 

QUESTIONS AND ANSWERS

 

 

 

1

 

SUMMARY

 

 

 

15

 

The Parties to the Merger

 

 

 

15

 

The Merger and the Merger Agreement

 

 

 

16

 

Merger Consideration

 

 

 

16

 

Treatment of IBKC Preferred Stock and IBKC Depositary Shares

 

 

 

17

 

Treatment of IBKC Equity Awards

 

 

 

17

 

Material U.S. Federal Income Tax Consequences of the Merger

 

 

 

18

 

First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors

 

 

 

19

 

IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors

 

 

 

19

 

Opinion of First Horizon’s Financial Advisor

 

 

 

19

 

Opinions of IBKC’s Financial Advisors

 

 

 

20

 

Appraisal or Dissenters’ Rights in the Merger

 

 

 

21

 

Interests of Certain First Horizon Directors and Executive Officers in the Merger

 

 

 

22

 

Interests of Certain IBKC Directors and Executive Officers in the Merger

 

 

 

23

 

Governance of the Combined Company After the Merger

 

 

 

24

 

Commitments to the Community

 

 

 

26

 

Regulatory Approvals

 

 

 

26

 

Expected Timing of the Merger

 

 

 

26

 

Conditions to Complete the Merger

 

 

 

26

 

Termination of the Merger Agreement

 

 

 

27

 

Termination Fee

 

 

 

28

 

Accounting Treatment

 

 

 

28

 

The Rights of Holders of IBKC Common Stock Will Change as a Result of the Merger

 

 

 

29

 

Listing of First Horizon Common Stock and Rollover First Horizon Depositary Shares in Respect of Rollover First Horizon Preferred Stock; Delisting and Deregistration of IBKC Common Stock and Depositary Shares in Respect of IBKC Preferred Stock

 

 

 

29

 

The First Horizon Special Meeting

 

 

 

29

 

The IBKC Special Meeting

 

 

 

30

 

Litigation Relating to the Merger

 

 

 

30

 

Risk Factors

 

 

 

31

 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF FIRST HORIZON

 

 

 

32

 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF IBKC

 

 

 

34

 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

 

 

 

36

 

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

 

 

 

39

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

 

 

41

 

RISK FACTORS

 

 

 

43

 

THE FIRST HORIZON SPECIAL MEETING

 

 

 

54

 

Date, Time and Place of the Meeting

 

 

 

54

 

Matters to Be Considered

 

 

 

54

 

Recommendation of First Horizon’s Board of Directors

 

 

 

54

 

Record Date and Quorum

 

 

 

54

 

i


 

 

 

 

 

 

Page

Vote Required; Treatment of Abstentions and Failure to Vote

 

 

 

55

 

Attending the Special Meeting

 

 

 

56

 

Proxies

 

 

 

56

 

Shares Held in Street Name

 

 

 

57

 

Revocability of Proxies

 

 

 

57

 

Delivery of Proxy Materials

 

 

 

57

 

Solicitation of Proxies

 

 

 

57

 

Other Matters to Come Before the First Horizon Special Meeting

 

 

 

58

 

Assistance

 

 

 

58

 

FIRST HORIZON PROPOSALS

 

 

 

59

 

Proposal 1: First Horizon Merger Proposal

 

 

 

59

 

Proposal 2: First Horizon Charter Amendment Proposal

 

 

 

59

 

Proposal 3: First Horizon Compensation Proposal

 

 

 

59

 

Proposal 4: First Horizon Adjournment Proposal

 

 

 

60

 

THE IBKC SPECIAL MEETING

 

 

 

61

 

Date, Time and Place of the Meeting

 

 

 

61

 

Matters to Be Considered

 

 

 

61

 

Recommendation of IBKC’s Board of Directors

 

 

 

61

 

Record Date and Quorum

 

 

 

61

 

Vote Required; Treatment of Abstentions and Failure to Vote

 

 

 

62

 

Attending the Special Meeting

 

 

 

62

 

Proxies

 

 

 

63

 

Shares Held in Street Name

 

 

 

63

 

Revocability of Proxies

 

 

 

63

 

Delivery of Proxy Materials

 

 

 

64

 

Solicitation of Proxies

 

 

 

64

 

Other Matters to Come Before the IBKC Special Meeting

 

 

 

64

 

Assistance

 

 

 

64

 

IBKC PROPOSALS

 

 

 

65

 

Proposal 1: IBKC Merger Proposal

 

 

 

65

 

Proposal 2: IBKC Compensation Proposal

 

 

 

65

 

Proposal 3: IBKC Adjournment Proposal

 

 

 

66

 

INFORMATION ABOUT FIRST HORIZON

 

 

 

67

 

INFORMATION ABOUT IBKC

 

 

 

68

 

THE MERGER

 

 

 

69

 

Terms of the Merger

 

 

 

69

 

Background of the Merger

 

 

 

69

 

First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors

 

 

 

76

 

IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors

 

 

 

79

 

Opinion of First Horizon’s Financial Advisor

 

 

 

82

 

Opinions of IBKC’s Financial Advisors

 

 

 

91

 

Unaudited Financial Forecasts

 

 

 

111

 

Interests of Certain First Horizon Directors and Executive Officers in the Merger

 

 

 

116

 

Interests of Certain IBKC Directors and Executive Officers in the Merger

 

 

 

122

 

Governance of the Combined Company After the Merger

 

 

 

132

 

ii


 

 

 

 

 

 

Page

Commitments to the Community

 

 

 

135

 

Accounting Treatment

 

 

 

135

 

Regulatory Approvals

 

 

 

135

 

Treatment of IBKC Preferred Stock and IBKC Depositary Shares

 

 

 

137

 

Stock Exchange Listings

 

 

 

138

 

Appraisal or Dissenters’ Rights in the Merger

 

 

 

138

 

Litigation Relating to the Merger

 

 

 

142

 

THE MERGER AGREEMENT

 

 

 

144

 

Explanatory Note Regarding the Merger Agreement

 

 

 

144

 

Structure of the Merger

 

 

 

144

 

Merger Consideration

 

 

 

145

 

Fractional Shares

 

 

 

145

 

Governing Documents

 

 

 

145

 

Treatment of IBKC Equity Awards

 

 

 

145

 

Closing and Effective Time of the Merger

 

 

 

147

 

Conversion of Shares; Exchange of IBKC Stock Certificates

 

 

 

147

 

Representations and Warranties

 

 

 

148

 

Covenants and Agreements

 

 

 

150

 

Combined Company Governance and Headquarters Matters

 

 

 

155

 

Shareholder Meetings and Recommendation of First Horizon’s and IBKC’s Boards of Directors

 

 

 

155

 

Agreement Not to Solicit Other Offers

 

 

 

156

 

Conditions to Complete the Merger

 

 

 

157

 

Termination of the Merger Agreement

 

 

 

158

 

Effect of Termination

 

 

 

159

 

Termination Fee

 

 

 

159

 

Expenses and Fees

 

 

 

160

 

Amendment, Waiver and Extension of the Merger Agreement

 

 

 

160

 

Governing Law

 

 

 

161

 

Specific Performance

 

 

 

161

 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

 

 

 

162

 

Tax Consequences of the Merger Generally

 

 

 

163

 

Cash Instead of a Fractional Share

 

 

 

164

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

 

 

166

 

DESCRIPTION OF ROLLOVER FIRST HORIZON PREFERRED STOCK

 

 

 

176

 

First Horizon Preferred Stock

 

 

 

176

 

First Horizon Series B Preferred Stock

 

 

 

176

 

First Horizon Series C Preferred Stock

 

 

 

184

 

First Horizon Series D Preferred Stock

 

 

 

191

 

First Horizon Depositary Shares

 

 

 

200

 

COMPARISON OF SHAREHOLDERS’ RIGHTS

 

 

 

204

 

LEGAL MATTERS

 

 

 

218

 

EXPERTS

 

 

 

219

 

DEADLINES FOR SUBMITTING SHAREHOLDER PROPOSALS

 

 

 

220

 

WHERE YOU CAN FIND MORE INFORMATION

 

 

 

222

 

iii


 

 

 

 

 

 

Page

Annex A Agreement and Plan of Merger by and between First Horizon National Corporation and IBERIABANK Corporation dated as of November 3, 2019

 

 

 

A-1

 

Annex B Opinion of Morgan Stanley & Co. LLC

 

 

 

B-1

 

Annex C Opinion of Keefe, Bruyette & Woods, Inc.

 

 

 

C-1

 

Annex D Opinion of Goldman Sachs & Co. LLC

 

 

 

D-1

 

Annex E Part 13 of the LBCA

 

 

 

E-1

 

Annex F Form of First Horizon Charter Amendment—Authorized Common Stock

 

 

 

F-1

 

Annex G Form of First Horizon Charter Amendment—Preferred Stock

 

 

 

G-1

 

iv


 

QUESTIONS AND ANSWERS

The following are some questions that you may have about the merger and the First Horizon special meeting or the IBKC special meeting, and brief answers to those questions. We urge you to read carefully the remainder of this joint proxy statement/prospectus because the information in this section does not provide all of the information that might be important to you with respect to the merger and the First Horizon special meeting or the IBKC special meeting. Additional important information is also contained in the documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 222.

In this joint proxy statement/prospectus, unless the context otherwise requires:

 

 

“First Horizon” refers to First Horizon National Corporation;

 

 

“First Horizon charter amendment” refers to the proposed amendment of the First Horizon charter to effect an increase in the number of authorized shares of First Horizon common stock from 400,000,000 to 700,000,000;

 

 

“First Horizon common stock” refers to the common stock of First Horizon, par value $0.625 per share;

 

 

“First Horizon preferred stock” refers to the perpetual preferred stock, Series A, no par value, of First Horizon;

 

 

“IBKC” refers to IBERIABANK Corporation;

 

 

“IBKC common stock” refers to the common stock of IBKC, par value $1.00 per share;

 

 

“IBKC depositary shares” refers to the depositary shares each representing a 1/400th interest in a share of the applicable series of IBKC preferred stock;

 

 

“IBKC preferred stock” refers to, collectively, IBKC series B preferred stock, IBKC series C preferred stock and IBKC series D preferred stock;

 

 

“IBKC series B preferred stock” refers to the 6.625% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series B, par value $1.00, of IBKC; “IBKC series C preferred stock” refers to the 6.60% Fixed-to-Floating Non-Cumulative Perpetual Preferred stock, Series C, par value $1.00, of IBKC; “IBKC series D preferred stock” refers to the 6.100% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, series D, par value $1.00, of IBKC;

 

 

“rollover First Horizon preferred stock” refers to all of the following: “First Horizon series B preferred stock,” the perpetual preferred stock, series B, no par value, of First Horizon; “First Horizon series C preferred stock,” the perpetual preferred stock, series B, no par value, of First Horizon; and “First Horizon series D preferred stock,” the perpetual preferred stock, series D, no par value, of First Horizon;

 

 

“rollover First Horizon depositary shares” refers to the depositary shares each representing a 1/400th interest in a share of the applicable series of rollover First Horizon preferred stock and

 

 

“shareholders” or “holders” refers to holders of shares of the capital stock of First Horizon, IBKC or the combined company (as defined below), as the context suggests.

 

Q:

 

Why am I receiving this joint proxy statement/prospectus?

 

A:

 

You are receiving this joint proxy statement/prospectus because First Horizon and IBKC have agreed to combine their companies in a merger of equals structured through a merger of IBKC with and into First Horizon (the “merger”), with First Horizon as the surviving entity (the “combined company” or “First Horizon,” as the case may be). A copy of the Agreement and Plan of Merger, dated as of November 3, 2019, by and between First Horizon and IBKC (the “merger agreement”) is attached as Annex A to this joint proxy statement/prospectus and is incorporated by reference herein. Following the completion of the merger, IBERIABANK, a subsidiary of IBKC, will merge with and into First Horizon Bank (the “bank merger”), a

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subsidiary of First Horizon, with First Horizon Bank as the surviving bank (the “combined bank”). In this joint proxy statement/prospectus, we refer to the closing of the transactions contemplated by the merger agreement as the “closing” and the date on which the closing occurs as the “closing date.”

     

In order to complete the merger, among other things:

 

 

holders of First Horizon common stock must approve the merger agreement (the “First Horizon merger proposal”);

 

 

holders of First Horizon common stock must approve the proposed amendment of the restated charter of First Horizon (the “First Horizon charter”) to effect an increase in the number of authorized shares of First Horizon common stock from 400,000,000 to 700,000,000 (the “First Horizon charter amendment proposal”); and

 

 

holders of IBKC common stock must approve the merger agreement (the “IBKC merger proposal”).

First Horizon is holding a special meeting of holders of First Horizon common stock (the “First Horizon special meeting”) to obtain approval of the First Horizon merger proposal and the approval of the First Horizon charter amendment proposal. Holders of First Horizon preferred stock are also entitled to notice of the special meeting, but holders of First Horizon preferred stock and holders of depositary shares representing interests in the shares of First Horizon preferred stock are not entitled to and are not requested to vote at the First Horizon special meeting.

Holders of First Horizon common stock will also be asked to approve the proposal to adjourn the First Horizon special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the First Horizon special meeting to approve the First Horizon merger proposal and/or the First Horizon charter amendment proposal or (ii) if adjournment is necessary or appropriate to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of First Horizon common stock (the “First Horizon adjournment proposal”). Pursuant to First Horizon’s bylaws, whether or not a quorum is obtained at the First Horizon special meeting, the chairman of the First Horizon special meeting may adjourn the meeting without notice, except as provided by law and other than by announcement at the First Horizon special meeting, and may do so without a vote of holders of First Horizon common stock. Holders of First Horizon common stock will also be asked to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by First Horizon to its named executive officers in connection with the merger (the “First Horizon compensation proposal”).

IBKC is holding a special meeting of holders of IBKC common stock (the “IBKC special meeting”) to obtain approval of the IBKC merger proposal. Holders of IBKC preferred stock will receive appraisal rights and are also entitled to notice of the special meeting. Holders of IBKC preferred stock and holders of IBKC depositary shares are not entitled to and are not requested to vote at the IBKC special meeting.

Holders of IBKC common stock will also be asked to approve, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by IBKC to its named executive officers in connection with the merger (the “IBKC compensation proposal”) and to approve the proposal to adjourn the IBKC special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the IBKC special meeting, to approve the IBKC merger proposal or (ii) if adjournment is necessary or appropriate, to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of IBKC common stock and holders of IBKC preferred stock (the “IBKC adjournment proposal”). Under IBKC’s bylaws, the IBKC special meeting may be adjourned without new notice being given unless a new record date is set for the adjourned meeting. Pursuant to IBKC’s bylaws and except as may be otherwise required by law or IBKC’s articles of incorporation, the IBKC board of directors may, by resolution upon public notice given prior to the scheduled date of the IBKC special meeting, postpone the IBKC special meeting.

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This document is also a prospectus that is being delivered to holders of IBKC common stock and holders of IBKC preferred stock because, in connection with the merger, First Horizon is offering shares of First Horizon common stock to holders of IBKC common stock and is also issuing shares of rollover First Horizon preferred stock to holders of the applicable series of IBKC preferred stock. Each share of IBKC preferred stock will be automatically converted into the right to receive one (1) share of the applicable series of rollover First Horizon preferred stock in the merger. Under the Louisiana Business Corporation Act (the “LBCA”), holders of IBKC preferred stock will receive appraisal rights in connection with the merger. Following the completion of the merger, each outstanding IBKC depositary share will be automatically converted into a rollover First Horizon depositary share.

This joint proxy statement/prospectus contains important information about the merger and the other proposals being voted on at the First Horizon and IBKC special meetings. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of common stock voted by proxy without attending your meeting. Your vote is important and we encourage you to submit your proxy as soon as possible.

 

Q:

  What will happen in the merger?

 

A:

 

In the merger, IBKC will merge with and into First Horizon. Each share of IBKC common stock issued and outstanding immediately prior to the effective time of the merger (the “effective time”) (other than certain shares held by First Horizon or IBKC) will be converted into the right to receive 4.584 shares (the “exchange ratio” and such shares, the “merger consideration”) of First Horizon common stock. After completion of the merger, IBKC will no longer be a public company, and IBKC common stock and IBKC depositary shares will be delisted from The NASDAQ Stock Market LLC (“NASDAQ”), will be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will cease to be publicly traded. Holders of First Horizon common stock will continue to own their existing shares of First Horizon common stock. See the information provided in the section entitled “The Merger Agreement—Structure of the Merger” beginning on page 144 and the merger agreement for more information about the merger.

 

Q:

  When and where will each of the special meetings take place?

 

A:

 

The First Horizon special meeting will be held at First Horizon Building M-Level Auditorium 165 Madison Avenue Memphis, TN 38103, on April 24, 2020 at 10:00 AM local time.

     

The IBKC special meeting will be held at IBERIABANK, 601 Poydras Street, 20th Floor, New Orleans, Louisiana 70130, on April 24, 2020 at 10:00 AM local time.

     

Even if you plan to attend your respective company’s special meeting, First Horizon and IBKC recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the applicable special meeting. Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares.

 

Q:

 

What matters will be considered at each of the special meetings?

 

A:

 

At the First Horizon special meeting, holders of First Horizon common stock will be asked to consider and vote on the following proposals:

 

 

First Horizon Proposal 1: The First Horizon merger proposal. Approval of the merger agreement;

 

 

First Horizon Proposal 2: The First Horizon charter amendment proposal. Approval of the amendment to First Horizon’s charter to effect an increase in the number of authorized shares of First Horizon common stock from 400,000,000 to 700,000,000, effective only upon completion of the merger;

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First Horizon Proposal 3: The First Horizon compensation proposal. Approval of, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by First Horizon to its named executive officers in connection with the merger; and

 

 

First Horizon Proposal 4: The First Horizon adjournment proposal. Approval of the adjournment of the First Horizon special meeting to solicit additional proxies if a quorum is not present and (i) if there are not sufficient votes at the time of the First Horizon special meeting to approve the First Horizon merger proposal and/or the First Horizon charter amendment proposal or (ii) if necessary or appropriate, to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of First Horizon common stock.

     

At the IBKC special meeting, holders of IBKC common stock will be asked to consider and vote on the following proposals:

 

 

IBKC Proposal 1: The IBKC merger proposal. Approval of the merger agreement;

 

 

IBKC Proposal 2: The IBKC compensation proposal. Approval of, on an advisory (non-binding) basis, the merger-related compensation payments that will or may be paid by IBKC to its named executive officers in connection with the merger; and

 

 

IBKC Proposal 3: The IBKC adjournment proposal. Approval of the adjournment of the IBKC special meeting to solicit additional proxies (i) if there are not sufficient votes at the time of the IBKC special meeting to approve the IBKC merger proposal or (ii) if necessary or appropriate, to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of IBKC common stock.

In order to complete the merger, among other things, holders of First Horizon common stock must approve the First Horizon merger proposal and the First Horizon charter amendment, and holders of IBKC common stock must approve the IBKC merger proposal. None of the approval of the First Horizon adjournment proposal, the First Horizon compensation proposal, the IBKC compensation proposal or the IBKC adjournment proposal are conditions to the obligations of First Horizon or IBKC to complete the merger.

 

Q:

 

What will holders of IBKC common stock receive in the merger?

 

A:

 

In the merger, holders of IBKC common stock will receive 4.584 shares of First Horizon common stock for each share of IBKC common stock held immediately prior to the completion of the merger. First Horizon will not issue any fractional shares of First Horizon common stock in the merger. Holders of IBKC common stock who would otherwise be entitled to a fractional share of First Horizon common stock in the merger will instead receive an amount in cash (rounded to the nearest cent) determined by multiplying the average closing-sale price per share of First Horizon common stock for the consecutive period of five (5) trading days immediately preceding (but not including) the day on which the merger is completed (the “First Horizon closing share value”) by the fraction of a share (rounded to the nearest thousandth when expressed in decimal) of First Horizon common stock that such shareholder would otherwise be entitled to receive.

 

Q:

 

What will holders of IBKC preferred stock receive in the merger?

 

A:

 

In the merger, each share of IBKC series B preferred stock, IBKC series C preferred stock and IBKC series D preferred stock, in each case issued and outstanding immediately prior to the effective time and excluding dissenting shares, will be converted into the right to receive one (1) share of First Horizon series B preferred stock, First Horizon series C preferred stock and First Horizon series D preferred stock, respectively.

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Q:

 

What will holders of IBKC depositary shares receive in the merger?

 

A:

 

In the merger, each outstanding IBKC depositary share (other than IBKC depositary shares in respect of dissenting shares of IBKC preferred stock) will become a rollover First Horizon depositary share and will represent a 1/400th interest in a share of the applicable series of rollover First Horizon preferred stock, which will have terms that are the same as the terms of the applicable series of outstanding IBKC preferred stock. Upon completion of the merger, First Horizon will assume the obligations of IBKC under the applicable deposit agreements. For more information, see “Description of Rollover First Horizon Preferred Stock” beginning on page 176.

 

Q:

 

What will holders of First Horizon common stock receive in the merger?

 

A:

 

In the merger, holders of First Horizon common stock will not receive any consideration, and their shares of First Horizon common stock will remain outstanding and will constitute shares of the combined company. Following the merger, shares of First Horizon common stock will continue to be traded on the New York Stock Exchange (“NYSE”).

 

Q:

 

Will the value of the merger consideration change between the date of this joint proxy statement/prospectus and the time the merger is completed?

 

A:

 

Yes. Although the number of shares of First Horizon common stock that holders of IBKC common stock will receive is fixed, the value of the merger consideration will fluctuate between the date of this joint proxy statement/prospectus and the completion of the merger based upon the market value for First Horizon common stock. Any fluctuation in the market price of First Horizon common stock will change the value of the shares of First Horizon common stock that holders of IBKC common stock will receive. Neither First Horizon nor IBKC is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of First Horizon common stock or IBKC common stock.

 

Q:

 

How will the merger affect IBKC equity awards?

 

A:

 

With respect to IBKC equity awards granted prior to the execution of the merger agreement, unless otherwise mutually agreed by the parties and a holder of any such IBKC equity award, at the effective time:

 

 

each outstanding and unexercised option to purchase IBKC common stock under IBKC’s equity compensation plans (each an “IBKC stock option”) shall, automatically and without any required action on the part of the holder thereof, vest and be converted into an option to purchase First Horizon common stock based on the exchange ratio and be subject to the same terms and conditions, after giving effect to any “change in control” provisions under the applicable IBKC equity incentive plan or award agreement, that applied to the corresponding IBKC stock option immediately prior to the effective time;

 

 

each outstanding award in respect of a share of IBKC common stock subject to vesting, repurchase or other lapse restriction (each an “IBKC restricted stock award”) shall, automatically and without any required action on the part of the holder thereof, vest and be converted into the right to receive the merger consideration;

 

 

each outstanding performance stock unit award in respect of shares of IBKC common stock (each, an “IBKC PSU”) shall, automatically and without any required action on the part of the holder thereof, vest and be converted into the right to receive the merger consideration, with the number of IBKC PSUs entitled to receive the merger consideration determined immediately prior to the effective time based on the greater of (i) the target performance level or (ii) the actual performance level through September 30, 2019, as reasonably determined by the compensation committee of the IBKC board of directors; and

 

 

each outstanding phantom stock award in respect of shares of IBKC common stock (each, an “IBKC phantom stock award”) shall, automatically and without any required action on the

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part of the holder thereof, vest and entitle the holder of such IBKC phantom stock award to an amount in cash equal to the product of (i) the closing price of one (1) share of First Horizon common stock on the closing date and (ii) the number of shares of First Horizon common stock underlying such IBKC phantom stock award, adjusted based on the exchange ratio.

To the extent the terms of any IBKC equity award granted on or after the date of the merger agreement expressly provide for treatment in connection with the occurrence of the effective time that is different from the treatment described above, or the parties and a holder of any IBKC equity award mutually agree to treatment that is different from the treatment described above, then in each case, the terms of such IBKC equity award or mutual agreement, as applicable, shall control; provided that, at the effective time, each such IBKC equity award will automatically and without any required action on the part of the holder thereof, cease to represent an equity award denominated in shares of IBKC common stock and will be converted into an equity award denominated in shares of First Horizon common stock (based on the exchange ratio).

 

Q:

 

What if I own IBKC depositary shares and wish to exercise appraisal rights?

     

If you hold IBKC depositary shares and you wish that appraisal rights be exercised in respect of the merger, IBKC requests that you complete the form of instruction to be provided to you (in accordance with the instructions set out in the form) and return it to your bank, broker or other nominee, as applicable, to direct the depository to exercise appraisal rights on your behalf following the depository’s usual procedures and in accordance with requirements of Louisiana law.

     

In the merger, each share of IBKC preferred stock issued and outstanding immediately prior to the effective time (other than dissenting shares) will be converted into the right to receive one (1) share of an applicable newly issued series of First Horizon preferred stock having the same terms as the terms of such share of IBKC preferred stock. For more information, see “Description of Rollover First Horizon Preferred Stock” beginning on page 176.

 

Q:

 

How does the First Horizon board of directors recommend that I vote at the First Horizon special meeting?

 

A:

 

The First Horizon board of directors unanimously recommends that you vote “FOR” the First Horizon merger proposal, “FOR” the First Horizon charter amendment proposal, “FOR” the First Horizon compensation proposal and “FOR” the First Horizon adjournment proposal.

     

In considering the recommendations of the First Horizon board of directors, holders of First Horizon common stock should be aware that First Horizon directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of holders of First Horizon common stock generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger—Interests of Certain First Horizon Directors and Executive Officers in the Merger” beginning on page 116.

 

Q:

 

How does the IBKC board of directors recommend that I vote at the IBKC special meeting?

 

A:

 

The IBKC board of directors unanimously recommends that you vote “FOR” the IBKC merger proposal, “FOR” the IBKC compensation proposal and “FOR” the IBKC adjournment proposal.

     

In considering the recommendations of the IBKC board of directors, holders of IBKC common stock should be aware that IBKC directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of holders of IBKC common stock generally. For a more complete description of these interests, see the information provided in the section entitled “The Merger—Interests of Certain IBKC Directors and Executive Officers in the Merger” beginning on page 122.

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Q:

 

Who is entitled to vote at the First Horizon special meeting?

 

A:

 

The record date for the First Horizon special meeting is February 24, 2020. All holders of First Horizon common stock who held shares at the close of business on the record date for the First Horizon special meeting are entitled to receive notice of, and to vote at, the First Horizon special meeting.

     

Each holder of First Horizon common stock is entitled to cast one (1) vote on each matter properly brought before the First Horizon special meeting for each share of First Horizon common stock that such holder owned of record as of the record date. As of February 24, 2020, there were 311,782,256 outstanding shares of First Horizon common stock.

     

Physical attendance at the special meeting is not required to vote. See below and the section entitled “The First Horizon Special Meeting—Proxies” beginning on page 56 for instructions on how to vote your shares without attending the First Horizon special meeting.

 

Q:

 

Who is entitled to vote at the IBKC special meeting?

 

A:

 

The record date for the IBKC special meeting is February 24, 2020. All holders of IBKC common stock who held shares at the close of business on the record date for the IBKC special meeting are entitled to receive notice of, and to vote at, the IBKC special meeting.

     

Each holder of IBKC common stock is entitled to cast one (1) vote on each matter properly brought before the IBKC special meeting for each share of IBKC common stock that such holder owned of record as of the record date. As of February 24, 2020, there were 52,583,117 outstanding shares of IBKC common stock.

     

Physical attendance at the special meeting is not required to vote. See below and the section entitled “The IBKC Special Meeting—Proxies” beginning on page 63 for instructions on how to vote your shares of IBKC common stock without attending the IBKC special meeting.

 

Q:

 

What constitutes a quorum for the First Horizon special meeting?

 

A:

 

The presence at the First Horizon special meeting, in person or by proxy, of holders of a majority of the outstanding shares of First Horizon common stock entitled to vote at the First Horizon special meeting will constitute a quorum for purposes of taking actions on the First Horizon merger proposal, the First Horizon charter amendment proposal, the First Horizon compensation proposal and the First Horizon adjournment proposal. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

 

Q:

 

What constitutes a quorum for the IBKC special meeting?

 

A:

 

The presence at the IBKC special meeting, in person or by proxy, of the holders of a majority of the outstanding shares of IBKC common stock entitled to vote at the IBKC special meeting will constitute a quorum for purposes of taking actions on the IBKC merger proposal, the IBKC compensation proposal and the IBKC adjournment proposal. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

 

Q:

 

What vote is required for the approval of each proposal at the First Horizon special meeting?

 

A:

 

First Horizon Proposal 1: First Horizon merger proposal. Approval of the First Horizon merger proposal requires the affirmative vote of a majority of all the votes entitled to be cast on the First Horizon merger proposal by the holders of First Horizon common stock. Shares of First Horizon common stock not present, and shares present and not voted, whether by broker non-vote, abstention or otherwise, will have the same effect as votes cast “AGAINST” the proposal to approve the merger agreement.

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First Horizon Proposal 2: First Horizon charter amendment proposal. Approval of the First Horizon charter amendment proposal to effect an increase in the number of authorized shares of First Horizon common stock from 400,000,000 to 700,000,000 requires the affirmative vote of a majority of the votes cast on the First Horizon charter amendment proposal by the holders of First Horizon common stock. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the First Horizon charter amendment proposal.

     

First Horizon Proposal 3: First Horizon compensation proposal. Approval of the First Horizon compensation proposal requires the affirmative vote of a majority of the votes cast by the holders of First Horizon common stock. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the First Horizon compensation proposal.

     

First Horizon Proposal 4: First Horizon adjournment proposal. Approval of the First Horizon adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of First Horizon common stock at the First Horizon special meeting. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the First Horizon adjournment proposal.

 

Q:

 

What vote is required for the approval of each proposal at the IBKC special meeting?

 

A:

 

IBKC Proposal 1: IBKC merger proposal. Approval of the IBKC merger proposal requires the affirmative vote of a majority of all the votes entitled to be cast on the IBKC merger proposal by the holders of IBKC common stock. Shares of IBKC common stock not present, and shares present and not voted, whether by broker non-vote, abstention or otherwise, will have the same effect as votes cast “AGAINST” the proposal to approve the merger agreement.

     

IBKC Proposal 2: IBKC compensation proposal. Approval of the IBKC compensation proposal requires the affirmative vote of a majority of the votes cast by the holders of IBKC common stock. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the IBKC compensation proposal.

     

IBKC Proposal 3: IBKC adjournment proposal. Approval of the IBKC adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of IBKC common stock. Accordingly, an abstention or a broker non-vote or other failure to vote will have no effect on the outcome of the IBKC adjournment proposal.

 

Q:

 

Why am I being asked to consider and vote on a proposal to approve, by non-binding, advisory vote, merger-related compensation arrangements for the First Horizon and IBKC named executive officers (i.e., the First Horizon compensation proposal and the IBKC compensation proposal)?

 

A:

 

Under Securities and Exchange Commission (“SEC”) rules, First Horizon and IBKC are required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to First Horizon’s or IBKC’s named executive officers, respectively, that is based on or otherwise relates to the merger.

 

Q:

 

What happens if holders of First Horizon or IBKC common stock do not approve, by non-binding, advisory vote, merger-related compensation arrangements for First Horizon’s or IBKC’s named executive officers (i.e., the First Horizon compensation proposal and the IBKC compensation proposal?)

 

A:

 

The votes on the proposals to approve the merger-related compensation arrangements for each of First Horizon’s and IBKC’s named executive officers are separate and apart from the votes to approve the other proposals being presented at the First Horizon and IBKC special meetings. Because the votes on the proposals to approve the merger-related executive compensation are advisory in nature only, they will not be binding upon First Horizon, IBKC, or the combined company in the merger. Accordingly, the merger-related compensation will be paid to First

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Horizon’s and IBKC’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and other contractual arrangements even if the holders of First Horizon and/or IBKC common stock, respectively, do not approve the proposals to approve the merger-related executive compensation.

 

Q:

 

What if I hold shares in both First Horizon and IBKC?

 

A:

 

If you hold shares in both First Horizon common stock and IBKC common stock, you will receive separate packages of proxy materials. A vote cast as a holder of First Horizon common stock will not count as a vote cast as a holder of IBKC common stock, and a vote cast as a holder of IBKC common stock will not count as a vote cast as a holder of First Horizon common stock. Therefore, please submit separate proxies for your shares of First Horizon common stock and your shares of IBKC common stock.

 

Q:

 

How can I vote my shares in person at my respective special meeting?

 

A:

 

Record Holders. Shares held directly in your name as the holder of record of First Horizon or IBKC common stock may be voted in person at the First Horizon special meeting or the IBKC special meeting, as applicable. If you choose to vote your shares in person at the respective special meeting, please bring your enclosed proxy card and proof of identification.

     

Shares in “street name.” Shares held in a brokerage or other account in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares. If you choose to vote your shares in street name in person at the First Horizon special meeting or the IBKC special meeting, as applicable, please bring that signed legal proxy along with proof of identification.

     

Even if you plan to attend the First Horizon special meeting or the IBKC special meeting, as applicable, First Horizon and IBKC recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the respective special meeting.

     

Additional information on attending the special meetings can be found under the section entitled “The First Horizon Special Meeting” on page 54 and under the section entitled “The IBKC Special Meeting” on page 61.

 

Q:

 

How can I vote my shares without attending my respective special meeting?

 

A:

 

Whether you hold your shares directly as the holder of record of First Horizon or IBKC or beneficially in “street name,” you may direct your vote by proxy without attending the First Horizon special meeting or the IBKC special meeting, as applicable.

     

If you are a record holder of First Horizon common stock or IBKC common stock, you can vote your shares by proxy over the Internet, by telephone or by mail by following the instructions provided in the enclosed proxy card. If you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

     

Additional information on voting procedures can be found under the section entitled “The First Horizon Special Meeting” on page 54 and under the section entitled “The IBKC Special Meeting” on page 61.

 

Q:

 

What do I need to do now?

 

A:

 

After carefully reading and considering the information contained in this document, please vote as soon as possible. If you hold shares of First Horizon common stock or IBKC common stock, please respond by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope, or by submitting your proxy by telephone or through the Internet, as soon as possible so that your shares may be represented at your meeting. Please note

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that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.

 

Q:

 

If my shares are held in “street name” by a broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?

 

A:

 

No. Your bank, broker or other nominee cannot vote your shares without instructions from you. You should instruct your bank, broker or other nominee how to vote your shares in accordance with the instructions provided to you. Please check the voting form used by your bank, broker or other nominee.

 

Q:

 

Why is my vote important?

 

A:

 

Your failure to submit a proxy or vote in person, or failure to instruct your bank or broker how to vote, or abstention will have the same effect as a vote “AGAINST” approval of the IBKC merger proposal and the First Horizon merger proposal. The merger agreement must be approved by the affirmative vote of a majority of all the votes entitled to be cast on the First Horizon merger proposal by the holders of First Horizon common stock and by the affirmative vote of a majority of all the votes entitled to be cast on the IBKC merger proposal by the holders of IBKC common stock. The First Horizon charter amendment proposal must be approved by the affirmative vote of a majority of the votes cast on the First Horizon charter amendment proposal by the holders of First Horizon common stock. The First Horizon board of directors unanimously recommends that you vote “FOR” the First Horizon merger proposal and the First Horizon charter amendment proposal, and the IBKC board of directors unanimously recommends that you vote “FOR” the IBKC merger proposal.

 

Q:

 

What will happen if I return my proxy card without indicating how to vote?

 

A:

 

If you sign and return your proxy card without indicating how to vote on any particular proposal, the shares of First Horizon common stock represented by your proxy will be voted as recommended by the First Horizon board of directors with respect to such proposals or the shares of IBKC common stock represented by your proxy will be voted as recommended by the IBKC board of directors with respect to such proposals, as the case may be.

 

Q:

 

Can I change my vote after I have delivered my proxy or voting instruction card?

 

A:

 

If you directly hold shares of First Horizon common stock or IBKC common stock in your name as a record holder, you can change your vote at any time before your proxy is voted at your meeting. You can do this by:

 

 

submitting a written statement that you would like to revoke your proxy to the corporate secretary of First Horizon or IBKC, as applicable;

 

 

signing and returning a proxy card with a later date;

 

 

attending the special meeting in person, notifying the corporate secretary and voting by ballot at the special meeting; or

 

 

voting by telephone or the Internet at a later time.

     

If your shares are held by a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote.

10


 

 

Q:

 

Will First Horizon be required to submit the First Horizon merger proposal and the First Horizon charter amendment proposal to its shareholders even if the First Horizon board of directors has withdrawn, modified or qualified its recommendation?

 

A:

 

Yes. Unless the merger agreement is terminated before the First Horizon special meeting, First Horizon is required to submit the First Horizon merger proposal and the First Horizon charter amendment proposal to its shareholders even if the First Horizon board of directors has withdrawn or modified its recommendation.

 

Q:

 

Will IBKC be required to submit the IBKC merger proposal to its shareholders even if the IBKC board of directors has withdrawn, modified or qualified its recommendation?

 

A:

 

Yes. Unless the merger agreement is terminated before the IBKC special meeting, IBKC is required to submit the IBKC merger proposal to its shareholders even if the IBKC board of directors has withdrawn or modified its recommendation.

 

Q:

 

Are holders of First Horizon common stock entitled to dissenters’ rights?

 

A:

 

No. Holders of First Horizon common stock are not entitled to dissenters’ rights under the Tennessee Business Corporation Act (the “TBCA”). For more information, see the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 138.

 

Q:

 

Are holders of IBKC common stock entitled to appraisal rights?

 

A:

 

No. Holders of IBKC common stock are not entitled to appraisal rights under the LBCA. For more information, see the section entitled “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 138.

 

Q:

 

Are holders of IBKC preferred stock entitled to appraisal rights?

 

A:

 

Holders of record of IBKC preferred stock are entitled to exercise appraisal rights in connection with the merger, provided the proper procedures of Part 13 of the LBCA are followed. The Depository Trust Company (“DTC”), as nominee for the depository, is the holder of record of the shares of IBKC preferred stock as of the date of this joint proxy statement/prospectus.

     

The IBKC depositary shares are not a class or series of shares issued by IBKC and thus appraisal rights under Part 13 of the LBCA do not independently apply to the depositary shares. Accordingly, to direct the depository to exercise appraisal rights with respect to the IBKC preferred stock, holders of depositary shares will be required to follow the procedures provided by the depository with respect thereto and in accordance with requirements of Louisiana law.

     

If you hold IBKC depositary shares and you wish to exercise appraisal rights in respect of the merger, IBKC requests that you complete the form of instruction to be provided to you (in accordance with the instructions set out on the form) and return it to your bank, broker or other nominee, as applicable, to direct the depository to exercise appraisal rights on your behalf following their usual procedures.

     

A copy of Part 13 of the LBCA is attached as Annex E to this joint proxy statement/prospectus. Holders of IBKC preferred stock who desire to exercise appraisal rights, or holders of depositary shares who direct the depository to exercise appraisal rights, pursuant to Part 13 of the LBCA, are urged to consult a legal advisor before electing or attempting to exercise these rights.

 

Q:

 

Are there any risks that I should consider in deciding whether to vote for the approval of the First Horizon merger proposal, the approval of the First Horizon charter amendment proposal or the approval of the IBKC merger proposal?

 

A:

 

Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 43. You also should read and carefully consider the risk

11


 

 

 

 

factors of First Horizon and IBKC contained in the documents that are incorporated by reference into this joint proxy statement/prospectus.

 

Q:

 

What are the material U.S. federal income tax consequences of the merger to holders of IBKC common stock or IBKC preferred stock?

 

A:

 

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and it is a condition to the respective obligations of First Horizon and IBKC to complete the merger that each of First Horizon and IBKC receives a legal opinion to that effect. Accordingly, the tax consequences of the merger to holders of IBKC common stock or IBKC preferred stock, as applicable, are as follows:

 

 

with respect to dissenting holders of IBKC preferred stock, a holder who receives solely cash for shares of IBKC preferred stock and does not otherwise own any IBKC common stock will recognize gain or loss equal to the difference between the amount of cash received by a holder of IBKC preferred stock and such holder’s tax basis in such holder’s shares of IBKC preferred stock;

 

 

a holder who receives solely shares of First Horizon common stock (or receives First Horizon common stock and cash solely in lieu of a fractional share) or rollover First Horizon preferred stock, as applicable, in exchange for shares of IBKC common stock or IBKC preferred stock, as applicable, generally will not recognize any gain or loss upon the merger, except with respect to the cash received in lieu of fractional share of First Horizon common stock;

 

 

with respect to dissenting holders of IBKC preferred stock, a holder who receives both cash for shares of IBKC preferred stock and shares of First Horizon common stock in respect of IBKC common stock, such cash may be allocated entirely to IBKC preferred stock and such dissenting holder will recognize gain (but not loss) equal to the difference between the amount of such cash received by a holder of IBKC preferred stock and such holder’s tax basis in such holder’s shares of IBKC preferred stock.

The United States federal income tax consequences described above may not apply to all holders of IBKC common stock or IBKC preferred stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

 

Q:

 

When is the merger expected to be completed?

 

A:

 

First Horizon and IBKC expect the merger to close in the second quarter of 2020. However, neither First Horizon nor IBKC can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. First Horizon and IBKC must first obtain the approval of holders of First Horizon common stock and holders of IBKC common stock for the merger and First Horizon must obtain approval of the First Horizon charter amendment proposal, as well as obtain necessary regulatory approvals and satisfy certain other closing conditions.

 

Q:

 

What are the conditions to complete the merger?

 

A:

 

The obligations of First Horizon and IBKC to complete the merger are subject to the satisfaction or waiver of certain closing conditions contained in the merger agreement, including the receipt of required regulatory approvals and the expiration of all statutory waiting periods without the imposition of any materially burdensome regulatory condition, tax opinions, approval by First Horizon shareholders of both the First Horizon merger proposal and the First Horizon charter amendment proposal and approval by IBKC stockholders of the IBKC merger proposal. For more information, see “The Merger Agreement—Conditions to Complete the Merger” beginning on page 157.

12


 

 

Q:

 

What happens if the merger is not completed?

 

A:

 

If the merger is not completed, neither holders of IBKC common stock nor holders of IBKC preferred stock will receive any consideration for their shares of IBKC common stock or IBKC preferred stock, respectively, in connection with the merger. Instead, IBKC will remain an independent public company, IBKC common stock and IBKC depositary shares will continue to be listed and traded on NASDAQ, and First Horizon will not complete the issuance of shares of First Horizon common stock or rollover First Horizon preferred stock pursuant to the merger agreement. In addition, if the merger agreement is terminated in certain circumstances, a termination fee of $156 million will be payable by either First Horizon or IBKC, as applicable. See “The Merger Agreement—Termination Fee” beginning on page 159 for a more detailed discussion of the circumstances under which a termination fee will be required to be paid.

 

Q:

 

What happens if I sell my shares after the applicable record date but before my company’s special meeting?

 

A:

 

Each of the First Horizon and IBKC record date is earlier than the date of the First Horizon special meeting and the IBKC special meeting, as applicable, and earlier than the date that the merger is expected to be completed. If you sell or otherwise transfer your shares of First Horizon common stock or IBKC common stock, as applicable, after the applicable record date but before the date of the applicable special meeting, you will retain your right to vote at such special meeting (provided that such shares remain outstanding on the date of such special meeting), but, with respect to the IBKC common stock, you will not have the right to receive the merger consideration to be received by IBKC shareholders in connection with the merger. In order to receive the merger consideration, you must hold your shares of IBKC common stock through the completion of the merger.

 

Q:

 

Should I send in my stock certificates now?

 

A:

 

No. Please do not send in your stock certificates with your proxy. After the merger is completed, an exchange agent selected by First Horizon and IBKC (the “exchange agent”) will send you instructions for exchanging IBKC stock certificates for the consideration to be received in the merger. See “The Merger Agreement—Conversion of Shares; Exchange of IBKC Stock Certificates” beginning on page 147.

 

Q:

 

What should I do if I receive more than one set of voting materials for the same special meeting?

 

A:

 

If you hold shares of First Horizon common stock or IBKC common stock in “street name” and also directly in your name as a holder of record or otherwise or if you hold shares of First Horizon common stock or IBKC common stock in more than one (1) brokerage account, you may receive more than one (1) set of voting materials relating to the same special meeting.

     

Record Holders. For shares held directly, please complete, sign, date and return each proxy card (or cast your vote by telephone or Internet as provided on each proxy card) or otherwise follow the voting instructions provided in this joint proxy statement/prospectus in order to ensure that all of your shares of First Horizon common stock or IBKC common stock are voted.

     

Shares in “street name.” For shares held in “street name” through a bank, broker or other nominee, you should follow the procedures provided by your bank, broker or other nominee to vote your shares.

 

Q:

 

Who can help answer my questions?

 

A:

 

First Horizon shareholders: If you have any questions about the merger or how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact First Horizon’s proxy solicitor, Morrow Sodali LLC, by calling toll-free at (800) 662-5200.

13


 

     

IBKC shareholders: If you have any questions about the merger or how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact IBKC’s proxy solicitor, Georgeson LLC by calling toll-free at (888) 206-0860.

 

Q:

 

Where can I find more information about First Horizon and IBKC?

 

A:

 

You can find more information about First Horizon and IBKC from the various sources described under “Where You Can Find More Information” beginning on page 222.

 

Q:

 

What is householding and how does it affect me?

 

A:

 

The SEC permits companies to send a single set of proxy materials to any household at which two or more shareholders reside, unless contrary instructions have been received, but only if the applicable shareholders provide advance notice and follow certain procedures. In such cases, each shareholder continues to receive a separate notice of the meeting and proxy card. Certain brokerage firms may have instituted householding for beneficial owners of First Horizon common stock and IBKC common stock, as applicable, held through brokerage firms. If your family has multiple accounts holding First Horizon common stock or IBKC common stock, as applicable, you may have already received a householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of this joint proxy statement/prospectus. The broker will arrange for delivery of a separate copy of this joint proxy statement/prospectus promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.

14


 

SUMMARY

This summary highlights selected information in this joint proxy statement/prospectus and may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement/prospectus and the other documents we refer you to for a more complete understanding of the matters being considered at the special meetings. In addition, we incorporate by reference important business and financial information about First Horizon and IBKC into this joint proxy statement/prospectus. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 222 of this joint proxy statement/prospectus.

The Parties to the Merger (pages 67 and 68)

First Horizon National Corporation

165 Madison Avenue
Memphis, Tennessee 38102
(901) 523-4444

First Horizon is a Tennessee corporation. First Horizon was incorporated in 1968 and is headquartered in Memphis, Tennessee. First Horizon is a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) and a financial holding company under the Gramm-Leach-Bliley Act. As of September 30, 2019, First Horizon had total consolidated assets of $43.7 billion, deposits of $31.9 billion, and shareholders’ equity of $4.7 billion.

First Horizon provides diversified financial services primarily through its principal subsidiary, First Horizon Bank. First Horizon Bank is a Tennessee-chartered bank and a member of the Federal Reserve System. Originally chartered as a national bank in 1864, the bank has over 250 bank branches in seven (7) southeastern states, has a fixed income business in eighteen (18) states spanning the U.S., and has a number of operating subsidiaries and divisions. First Horizon and its subsidiaries offer a wide range of financial services, including retail banking, commercial and business banking, wealth management, mortgage lending, asset based lending, fixed income, insurance and brokerage services.

First Horizon’s common stock is traded on the NYSE under the symbol “FHN.”

IBERIABANK Corporation

200 West Congress Street
Lafayette, Louisiana 70501
(337) 521-4003

IBKC, a Louisiana corporation, is a financial holding company with 319 combined locations, including 191 bank branch offices and three (3) loan production offices in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, South Carolina, North Carolina, Mississippi, Missouri, and New York, twenty-eight (28) title insurance offices in Arkansas, Tennessee and Louisiana and mortgage representatives in eighty-two (82) locations in twelve (12) states. The Company also has fourteen (14) wealth management locations in five (5) states and one (1) IBERIA Capital Partners LLC (“ICP”) office in Louisiana. As of September 30, 2019, IBKC had total consolidated assets of $31.7 billion, total deposits of $25.0 billion and shareholders’ equity of $4.3 billion.

IBKC’s principal executive office is located at 200 West Congress Street, Lafayette, Louisiana, and the telephone number at that office is (337) 521-4003. IBKC’s website is located at www.iberiabank.com. The information contained on IBKC’s website is not part of this joint proxy statement/prospectus.

IBKC is the holding company for IBERIABANK, a Louisiana chartered banking corporation headquartered in Lafayette, Louisiana; Lenders Title Company (“Lenders Title”), an Arkansas-

15


 

chartered title insurance and closing services agency headquartered in Little Rock, Arkansas; ICP, a corporate finance services firm; 1887 Leasing, LLC (“1887 Leasing”), a holding company for IBKC’s aircraft, IBERIA Asset Management, Inc. (“IAM”), which provides wealth management and trust advisory services to high net worth individuals, pension funds, corporations and trusts; and IBERIA CDE, LLC (“CDE”), which invests in purchased tax credits.

IBERIABANK offers commercial and retail banking products and services to customers throughout locations in ten (10) states. IBERIABANK provides these products and services in Louisiana, Alabama, Florida, Arkansas, Tennessee, Georgia, Texas, North Carolina, South Carolina and New York, as well as on-line at www.iberiabank.com and www.virtualbank.com. These products and services include a broad array of commercial, consumer, mortgage, and private banking products and services, trust advisory services, cash management, deposit and annuity products. Certain of IBERIABANK’s non-bank subsidiaries engage in financial services-related activities, including brokerage services, sales of variable annuities, and wealth management services. Lenders Title offers a full line of title insurance and loan closing services throughout Arkansas, Tennessee and Louisiana. ICP provides equity research, institutional sales and trading and corporate finance services throughout the energy industry. 1887 Leasing owns an aircraft used by management of IBKC and its subsidiaries. IAM provides wealth management advisory services for commercial and private banking clients. CDE is engaged in the purchase of tax credits.

IBKC common stock is traded on the NASDAQ under the symbol “IBKC.”

The Merger and the Merger Agreement (pages 69 and 144)

The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. You are encouraged to read the merger agreement carefully and in its entirety, as it is the primary legal document that governs the merger.

Subject to the terms and conditions of the merger agreement, at the completion of the merger, IBKC will merge with and into First Horizon, with First Horizon as the surviving corporation in a merger of equals. Following the completion of the merger, IBERIABANK, a subsidiary of IBKC, will merge with and into First Horizon Bank, a subsidiary of First Horizon, with First Horizon Bank as the surviving bank in the bank merger. Following the merger, IBKC common stock and IBKC depositary shares will be delisted from the NASDAQ, deregistered under the Exchange Act and will cease to be publicly traded.

Merger Consideration (page 145)

In the merger, holders of IBKC common stock will receive 4.584 shares of First Horizon common stock for each share of IBKC common stock they hold immediately prior to the effective time. First Horizon will not issue any fractional shares of First Horizon common stock in the merger. Holders of IBKC common stock who would otherwise be entitled to a fraction of a share of First Horizon common stock in the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent) based on the First Horizon closing share value.

First Horizon common stock is listed on the NYSE under the symbol “FHN,” and IBKC common stock is listed on the NASDAQ under the symbol “IBKC.” The following table shows the closing sale prices of First Horizon common stock and IBKC common stock as reported on the NYSE and NASDAQ, as applicable, on November 1, 2019, the last full trading day before the public announcement of the merger agreement, and on March 18, 2020, the last practicable trading day before the date of this joint proxy statement/prospectus. This table also shows the implied value of the merger consideration to be issued in exchange for each share of IBKC common stock, which was calculated by multiplying the closing price of First Horizon common stock on those dates by the exchange ratio of 4.584.

16


 

 

 

 

 

 

 

 

 

 

FIRST
HORIZON
Common
Stock

 

IBKC
Common
Stock

 

Implied Value
of One Share
of IBKC
Common
Stock

November 1, 2019

 

 

$

 

16.31

 

 

 

$

 

74.76

 

 

 

$

 

74.77

 

March 18, 2020

 

 

$

 

7.18

 

 

 

$

 

27.04

 

 

 

$

 

32.91

 

For more information on the exchange ratio, see the section entitled “The Merger—Terms of the Merger” beginning on page 69 and “The Merger Agreement—Merger Consideration” beginning on page 145.

Treatment of IBKC Preferred Stock and IBKC Depositary Shares (page 137)

In the merger, each share of IBKC series B preferred stock, IBKC series C preferred stock and IBKC series D preferred stock, in each case issued and outstanding immediately prior to the effective time and excluding dissenting shares, will be converted into the right to receive one (1) share of First Horizon series B preferred stock, First Horizon series C preferred stock and First Horizon series D preferred stock, respectively. The rollover First Horizon preferred stock will have terms that are the same as the terms of the applicable series of outstanding IBKC preferred stock, taking into account that IBKC will not be the surviving entity in the merger and, with respect to the IBKC series B preferred stock, taking into account that the optional redemption date for the First Horizon series B preferred stock may be deferred until the first dividend payment date that is at least five (5) years from the closing date.

Each outstanding share of IBKC series B preferred stock, IBKC series C preferred stock and IBKC series D preferred stock is presently represented by IBKC depositary shares. Upon completion of the merger, First Horizon will assume the obligations of IBKC under the applicable deposit agreements. Each IBKC depositary share (other than in respect of dissenting shares of IBKC preferred stock) will then become a rollover First Horizon depositary share and thereafter represent interests in shares of rollover First Horizon preferred stock. The IBKC depositary shares representing a 1/400th interest in a share of IBKC series B preferred stock, IBKC series C preferred stock and IBKC series D preferred stock are currently listed on the NASDAQ under the symbol “IBKCP,” “IBKCO” and “IBKCN,” respectively. The rollover First Horizon depositary shares are expected to be listed on the NYSE upon completion of the merger.

For further information, see “The Merger—Treatment of IBKC Preferred Stock and IBKC Depositary Shares” beginning on page 137.

Treatment of IBKC Equity Awards (page 145)

IBKC Stock Options

At the effective time, each outstanding and unexercised IBKC stock option granted prior to November 3, 2019 to purchase shares of IBKC common stock will, in accordance with the terms and conditions that were applicable to such stock options prior to the effective time and automatically and without any required action on the part of the holder thereof, accelerate and vest and be converted into an option to purchase shares of First Horizon common stock with the same terms and conditions, including exercisability and forfeiture terms, with the number of shares of First Horizon common stock and exercise price adjusted based on the exchange ratio.

IBKC Restricted Stock Awards

At the effective time, each outstanding IBKC restricted stock award granted prior to November 3, 2019 will, in accordance with the terms and conditions that were applicable to such restricted stock awards prior to the effective time and automatically and without any required action on the part of the holder thereof, accelerate and vest and be cancelled in exchange for the right to receive

17


 

immediately following the effective time, the merger consideration, less applicable taxes required to be withheld.

IBKC PSU Awards

At the effective time, each outstanding IBKC performance stock unit award (a “IBKC PSU award”) granted prior to November 3, 2019 will, in accordance with the terms and conditions that were applicable to such IBKC PSU awards prior to the effective time and automatically and without any required action on the part of the holder thereof, accelerate and vest and be cancelled in exchange for the right to receive the merger consideration, with the number of IBKC PSUs entitled to receive the merger consideration based on (i) the number of shares of IBKC common stock underlying such IBKC PSU award (including applicable dividend equivalents) determined based on the greater of (A) target performance and (B) actual performance through the September 30, 2019 as reasonably determined by the compensation committee of the IBKC board of directors and (ii) the exchange ratio immediately following the effective time, less applicable taxes required to be withheld.

IBKC Phantom Stock Awards

At the effective time, each outstanding IBKC phantom stock award granted prior to November 3, 2019 will, in accordance with the terms and conditions that were applicable to such IBKC phantom stock awards prior to the effective time and automatically and without any required action on the part of the holder thereof, accelerate and vest and be cancelled in exchange for the right to receive (without interest) an amount in cash equal to the product of (i) the closing price of First Horizon common stock on the closing date and (ii) the number of shares of First Horizon common stock underlying such IBKC phantom stock award (determined based on the exchange ratio and the number of shares of IBKC common stock underlying such IBKC phantom stock award).

IBKC Equity Awards Granted On or After November 3, 2019

Any IBKC equity awards are granted on or after November 3, 2019 will be converted into First Horizon equity awards with the number of shares of First Horizon common stock and exercise price, if applicable, adjusted based on the exchange ratio.

Material U.S. Federal Income Tax Consequences of the Merger (page 162)

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and it is a condition to the respective obligations of First Horizon and IBKC to complete the merger that each of First Horizon and IBKC receives a legal opinion to that effect. Accordingly, the tax consequences of the merger to holders of IBKC common stock or IBKC preferred stock are as follows:

 

 

with respect to dissenting holders of IBKC preferred stock, a holder who receives solely cash for shares of IBKC preferred stock and does not otherwise own any IBKC common stock will recognize gain or loss equal to the difference between the amount of cash received by a holder of IBKC preferred stock and such holder’s tax basis in such holder’s shares of IBKC preferred stock;

 

 

a holder who receives solely shares of First Horizon common stock (or receives First Horizon common stock and cash solely in lieu of a fractional share) or rollover First Horizon preferred stock, as applicable, in exchange for shares of IBKC common stock or IBKC preferred stock, as applicable, generally will not recognize any gain or loss upon the merger, except with respect to the cash received in lieu of fractional share of First Horizon common stock;

 

 

with respect to dissenting holders of IBKC preferred stock, a holder who receives both cash for shares of IBKC preferred stock and shares of First Horizon common stock in respect of IBKC common stock, such cash may be allocated entirely to IBKC preferred stock and such

18


 

 

 

 

dissenting holder will recognize gain (but not loss) equal to the difference between the amount of such cash received by a holder of IBKC preferred stock and such holder’s tax basis in such holder’s shares of IBKC preferred stock.

For more detailed information, please refer to “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 162.

The United States federal income tax consequences described above may not apply to all holders of IBKC common stock or IBKC preferred stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors (page 76)

The First Horizon board of directors has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of First Horizon and its shareholders and has unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement. The First Horizon board of directors unanimously recommends that holders of First Horizon common stock vote “FOR” the approval of the merger agreement, “FOR” the First Horizon charter amendment proposal and “FOR” the other proposals presented at the First Horizon special meeting. For a more detailed discussion of the First Horizon board of directors’ recommendation, see “The Merger—First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors” beginning on page 76.

IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors (page 79)

The IBKC board of directors has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of IBKC and its shareholders and has unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement. The IBKC board of directors unanimously recommends that holders of IBKC common stock vote “FOR” the approval of the merger agreement and “FOR” the other proposals presented at the IBKC special meeting. For a more detailed discussion of the IBKC board of directors’ recommendation, see “The Merger—IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors” beginning on page 79.

Opinion of First Horizon’s Financial Advisor (page 82)

First Horizon retained Morgan Stanley & Co. LLC (“Morgan Stanley”) to provide it with financial advisory services in connection with a possible merger with IBKC, and, if requested by First Horizon, a financial opinion with respect thereto. First Horizon selected Morgan Stanley to act as its financial advisor based on Morgan Stanley’s qualifications, expertise and reputation and its knowledge of the business and affairs of First Horizon. Morgan Stanley rendered to the First Horizon board of directors at its special meeting on November 3, 2019, its oral opinion, subsequently confirmed by delivery of a written opinion dated November 3, 2019, that, as of such date, and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth therein, the exchange ratio pursuant to the merger agreement was fair, from a financial point of view, to First Horizon.

The full text of the written opinion of Morgan Stanley, dated November 3, 2019, is attached as Annex B and incorporated by reference into this joint proxy statement/prospectus. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and

19


 

qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. Shareholders are urged to, and should, read the opinion carefully and in its entirety. Morgan Stanley’s opinion is directed to the First Horizon board of directors and addresses only the fairness, from a financial point of view, to First Horizon of the exchange ratio pursuant to the merger agreement as of the date of the opinion. Morgan Stanley’s opinion does not address any other aspect of the transactions contemplated by the merger agreement and does not constitute a recommendation to shareholders of First Horizon or shareholders of IBKC as to how to vote at any shareholders meetings held with respect to the merger or any other matter or whether to take any other action with respect to the merger. The summary of Morgan Stanley’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. In addition, the opinion does not in any manner address the price at which First Horizon common stock will trade following the consummation of the merger or at any time.

For a description of the opinion of Morgan Stanley, see “The Merger—Opinion of First Horizon’s Financial Advisor” beginning on page 82.

Opinions of IBKC’s Financial Advisors (page 91)

Opinion of Keefe, Bruyette & Woods, Inc.

In connection with the merger, IBKC’s financial advisor, Keefe, Bruyette & Woods, Inc. (“KBW”), delivered a written opinion, dated November 3, 2019, to the IBKC board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of IBKC common stock of the exchange ratio in the proposed merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion, is attached as Annex C to this document. The opinion was for the information of, and was directed to, the IBKC board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion does not address the underlying business decision of IBKC to engage in the merger or enter into the merger agreement or constitute a recommendation to the IBKC board of directors in connection with the merger, and it does not constitute a recommendation to any holder of IBKC common stock or any shareholder of any other entity as to how to vote or act in connection with the merger or any other matter.

Pursuant to an engagement letter between IBKC and KBW, IBKC agreed to pay KBW a cash fee equal to 0.70% of the aggregate merger consideration, which fee is estimated to be approximately $29 million, based on the closing share price of First Horizon common stock on November 1, 2019, $4,000,000 of which became payable upon IBKC entering into the merger agreement and the balance of which is contingent upon the completion of the merger.

For more information, see “The Merger—Opinions of IBKC’s Financial Advisors—Opinion of Keefe, Bruyette & Woods, Inc.” beginning on page 91 and Annex C to this joint proxy statement/prospectus.

Opinion of Goldman Sachs & Co. LLC

At a meeting of the IBKC board of directors, Goldman Sachs & Co. LLC (“Goldman Sachs”) rendered to the IBKC board of directors its oral opinion, subsequently confirmed in writing, to the effect that, as of November 3, 2019, the date of Goldman Sachs’ written opinion, and based upon and subject to the factors, qualifications and assumptions set forth in Goldman Sachs’ written opinion, the exchange ratio was fair from a financial point of view to the holders (other than First Horizon and its affiliates) of IBKC common stock.

The full text of the written opinion of Goldman Sachs, dated November 3, 2019, which sets forth the assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken in connection with the opinion, is attached to this joint proxy

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statement/prospectus as Annex D. The summary of the Goldman Sachs opinion contained in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs’ advisory services and opinion were provided for the information and assistance of the IBKC board of directors in connection with its consideration of the merger and the opinion does not constitute a recommendation as to how any holder of IBKC common stock should vote with respect to the merger or any other matter.

Pursuant to an engagement letter between IBKC and Goldman Sachs, IBKC has agreed to pay Goldman Sachs for its services in connection with the merger a fee that is estimated to be approximately $19.6 million, based on the closing share price of First Horizon common stock on November 1, 2019. $2.5 million of Goldman Sachs’ fee became payable upon the execution of the merger agreement and the remainder of Goldman Sachs’ fee will become payable upon completion of the merger.

For more information, see “The Merger—Opinions of IBKC’s Financial Advisors—Opinion of Goldman Sachs & Co. LLC” beginning on page 101 and Annex D to this joint proxy statement/prospectus.

Appraisal or Dissenters’ Rights in the Merger (page 138)

Holders of First Horizon common stock are not entitled to dissenters’ rights under the TBCA and holders of IBKC common stock are not entitled to appraisal rights under the LBCA. For more information, see “The Merger—Appraisal or Dissenters’ Rights in the Merger” beginning on page 138.

Holders of record of IBKC preferred stock are entitled to exercise appraisal rights in connection with the merger, provided the proper procedures of Part 13 of the LBCA are followed. DTC, as nominee for the depository, is the holder of record of the shares of IBKC preferred stock as of the date of this joint proxy statement/prospectus.

The IBKC depositary shares are not a class or series of shares issued by IBKC and thus appraisal rights under Part 13 of the LBCA do not independently apply to the depositary shares. Accordingly, to exercise or to direct the depository to exercise appraisal rights with respect to the IBKC preferred stock, holders of depositary shares will be required to follow the procedures provided by the depository with respect thereto and in accordance with requirements of Louisiana law.

If you hold IBKC depositary shares and you wish to exercise appraisal rights in respect of the merger, IBKC requests that you complete the form of instruction provided to you (in accordance with the instructions set out on the form) and return it to your bank, broker or other nominee, as applicable, to direct the depository to exercise appraisal rights on your behalf following their usual procedures. Although holders of depositary shares may attend the IBKC special meeting, such holders may not exercise appraisal rights with respect to, or vote, as applicable, the shares of IBKC preferred stock represented by such depositary shares in person at the IBKC special meeting.

A copy of Part 13 of the LBCA is attached as Annex E to this joint proxy statement/prospectus. Holders of IBKC preferred stock who desire to exercise appraisal rights, or holders of depositary shares who direct the depository to exercise appraisal rights, pursuant to Part 13 of the LBCA are urged to consult a legal advisor before electing or attempting to exercise these rights.

Under Part 13 of the LBCA, the holders of IBKC common stock will not be entitled to appraisal rights in connection with the merger if, on the record date for the IBKC special meeting, IBKC’s shares are traded in an organized market that has at least two thousand (2,000) shareholders and a market value of at least $20 million. IBKC common stock is currently listed on the NASDAQ, a national securities exchange, and is expected to continue to be so listed on the record date for the IBKC special meeting. Accordingly, the holders of IBKC common stock are not entitled to any appraisal rights in connection with the merger.

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Holders of IBKC preferred stock have a right to demand payment in cash of the “fair value” of their shares, as that term is defined in the LBCA. Shareholders who receive a fair value cash payment will not be entitled to receive any shares of rollover First Horizon preferred stock. Part 13 of the LBCA sets forth the rights of IBKC preferred shareholders who wish to demand appraisal for their shares. A summary of the material terms of the statutory procedures to be followed by a holder of IBKC preferred stock in order to perfect appraisal rights under the LBCA can be found under “The Merger—Appraisal or Dissenters’ Rights in the Merger—Holders of IBKC Preferred Stock,” beginning on page 138. Shareholders who do not properly follow appraisal rights procedures will receive the merger consideration provided under the merger agreement if the merger is completed. A copy of Part 13 of the LBCA is attached as Annex E to this joint proxy statement/prospectus.

Interests of Certain First Horizon Directors and Executive Officers in the Merger (page 116)

In considering the First Horizon board of directors’ recommendation to vote to approve the First Horizon merger proposal, holders of First Horizon common stock should be aware that First Horizon’s directors and executive officers may have interests in the merger that are different from, or in addition to, those of holders of First Horizon common stock generally and that may create potential conflicts of interest. These interests include:

 

 

D. Bryan Jordan and First Horizon have entered into a letter agreement with respect to the terms of Mr. Jordan’s employment following the closing. Pursuant to the letter agreement, Mr. Jordan will resign as Chairman on the closing date and continue to serve as the President and Chief Executive Officer of the combined company and the combined bank. On the chairman succession date (as such term is defined under “The Merger—Interests of Certain IBKC Directors and Executive Officers in the Merger—Chairman Letter Agreement of Mr. Byrd” beginning on page 124), Mr. Jordan will be reappointed as Chairman of the combined company and the combined bank, as further described under “The Merger—Governance of the Combined Company After the Merger” beginning on page 132. The letter agreement also provides for the waiver of Mr. Jordan’s right to terminate his employment for “good reason” under Mr. Jordan’s Change in Control Severance Agreement with First Horizon (the “Jordan CIC agreement”) as a result of Mr. Jordan’s resignation as Chairman or the reassignment of certain duties, so long as Mr. Jordan remains President and Chief Executive Officer and is reappointed as Chairman on the chairman succession date.

 

 

Each of William C. Losch III, David T. Popwell and Susan L. Springfield have entered into letter agreements (the “executive letter agreements”) with First Horizon that provide for the grant of closing incentive restricted stock awards in consideration for a waiver of the executive’s rights to terminate employment for “good reason” under the executive’s Change in Control Severance Agreement with First Horizon as a result of the executive’s new role at the combined company and any corresponding change in duties and responsibilities. The restricted stock awards will vest in full on the first anniversary of the closing date and will be forfeited upon any termination of employment other than termination by the surviving entity or surviving bank that is not for “cause.” All restricted stock awards also will be forfeited if the merger does not close and will be subject to repayment and recovery in full if the executive materially violates restrictive covenants in the letter agreement. The amounts of the closing incentive awards are $1,250,000 for Mr. Losch, $1,400,000 for Mr. Popwell and $863,000 for Ms. Springfield.

 

 

In connection with the merger, First Horizon intends to establish a retention program to promote retention and to incentivize efforts to consummate the merger and effectuate the integration and conversion. Awards under this retention program will be in the form of cash or full-value equity awards and will be contingent upon the recipient’s continued employment with the combined company through the first anniversary of the effective time, provided that such awards will vest or be payable (as applicable) upon a qualifying termination of

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employment. First Horizon’s executive officers (including certain of First Horizon’s named executive officers), other than Mr. Jordan and the officers who entered into the executive letter agreements described above, will be eligible to participate in this retention program.

 

 

First Horizon’s executive officers are each party to a Change in Control Severance Agreement with First Horizon that provides for certain benefits upon a termination by First Horizon other than for “cause,” disability or retirement, or upon a termination by the executive officer for “good reason,” within thirty-six (36) months following a change in control event, such as the merger.

 

 

At closing, certain of First Horizon’s directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company.

 

 

First Horizon’s directors and executive officers are entitled to continued indemnification and insurance coverage.

The First Horizon board of directors was aware of and considered these respective interests when deciding to adopt the merger agreement. For more information, see the section entitled “The Merger—Interests of Certain First Horizon Directors and Executive Officers in the Merger” beginning on page 116.

Interests of Certain IBKC Directors and Executive Officers in the Merger (page 122)

In considering the recommendation of the IBKC board of directors to vote for the IBKC merger proposal, holders of IBKC common stock should be aware that the directors and executive officers of IBKC may have interests in the merger that are different from, or in addition to, the interests of holders of IBKC common stock generally and that may create potential conflicts of interest. These interests include:

 

 

Daryl G. Byrd and First Horizon have entered into a letter agreement, which incorporates the terms of the succession plan described below under “The Merger—Governance of the Combined Company After the Merger” beginning on page 132 and sets forth the terms of Mr. Byrd’s compensation following the effective time. For the twenty-four (24)-month period following the effective time, Mr. Byrd’s annual target direct compensation and form of long-term incentive awards will be in the same amounts and on the same terms, and with the same payout determinations and amounts, as those that apply to the Chief Executive Officer of First Horizon (subject to certain exceptions, including that Mr. Byrd’s base salary and target annual incentive compensation will be no less than each as provided immediately before the closing date). For the subsequent thirty-six (36)-month period, Mr. Byrd will serve as a consultant to the combined company and the combined bank and will receive an annual consulting fee equal to (i) $3,750,000 for the first two (2) years and (ii) $3,500,000 for the third (3rd) year. As of the closing date, the combined company and the combined bank will grant Mr. Byrd a one-time cash integration and continuity award in the amount of $5,000,000, payable in quarterly installments over five (5) years. Mr. Byrd has agreed to be bound by certain restrictive covenants, including non-competition and non-solicitation covenants, for the five (5)-year period following the closing date. He will also be subject to indefinite non-disparagement and confidentiality covenants.

 

 

Mr. Byrd, IBKC and IBERIABANK have entered into a letter agreement, providing for the grant of a closing incentive restricted stock award with a grant date value of $5,000,000 that will vest on the six (6)-month anniversary of the completion of the merger.

 

 

Anthony J. Restel, Michael J. Brown, Elizabeth A. Ardoin and one (1) other executive officer who is not a named executive officer have entered into letter agreements with IBKC and IBERIABANK, providing for the grants of closing incentive restricted stock awards that will vest on the twelve (12)-month anniversary of the completion of the merger or, if earlier, upon any termination of employment other than a termination for “just cause” or resignation

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without “good reason.” All such restricted stock awards will be forfeited if the merger does not close and will be subject to repayment and recovery in full if the executive materially violates any of the restrictive covenants outlined in the letter agreements. The amounts of the closing incentive awards are $1,350,000 for Mr. Restel, $1,400,000 for Mr. Brown, $825,000 for Ms. Ardoin and $863,000 for the other executive officer who is not a named executive officer.

 

 

In connection with the merger, IBKC has established a retention program to promote retention and to incentivize efforts to consummate the merger and effectuate the integration and conversion. Awards under these retention programs will be in the form of cash or full-value equity awards. Cash awards will vest upon the attainment of certain service conditions, and full-value equity awards vest in three (3) equal installments and will vest upon a qualifying termination of employment. IBKC’s executive officers (including certain of IBKC’s named executive officers), other than Mr. Byrd and the executive officers who entered into the letter agreements described above, are eligible to participate in this retention program.

 

 

Unvested IBKC equity awards granted prior to the execution of the merger agreement held by executive officers that would otherwise be subject to vesting conditions will, in accordance with the terms and conditions applicable to such awards prior to the execution of the merger agreement, vest on the closing. IBKC equity awards granted following the execution of the merger agreement and converted into First Horizon equity awards will generally be eligible to vest upon a termination of the holder without “cause” or the holder’s resignation for “good reason” following the closing.

 

 

At closing, certain of IBKC’s directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company.

 

 

The restricted stock awards held by the IBKC non-employee directors that would otherwise vest on the first anniversary of the grant date will, in accordance with the terms and conditions applicable to such awards prior to the execution of the merger agreement, vest on the closing.

 

 

IBKC directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.

Governance of the Combined Company After the Merger (page 132)

Bylaws

Prior to the effective time, the First Horizon board of directors will take all actions necessary to cause the bylaws of First Horizon to be amended as set forth in Exhibit A to the merger agreement (such amendment, the “First Horizon bylaw amendment”), and as so amended, effective upon the completion of the merger, the bylaws of First Horizon will be the bylaws of the combined company, until thereafter amended as provided therein or in accordance with applicable law. The bylaws of First Horizon as amended pursuant to the merger agreement implement certain governance and related matters for the combined company following completion of the merger, including: the composition of the combined company’s board of directors, the roles of the Chairman of the Board and the Chief Executive Officer and related succession matters, the role of the lead director, the composition of the committees of the board of directors and the location of the headquarters of the combined company’s regional banking business. Each of the foregoing governance matters is discussed further below.

Board of Directors

Immediately after the effective time and until the third (3rd) anniversary of the closing date (the “expiration date”), the board of directors of the combined company and the combined bank will have seventeen (17) members, consisting of:

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the Chief Executive Officer of First Horizon as of immediately prior to the effective time and eight (8) additional members of the First Horizon board of directors as of immediately prior to the effective time, designated by First Horizon (collectively, the “continuing First Horizon directors” and, each, a “continuing First Horizon directors”); and

 

 

the Chief Executive Officer of IBKC as of immediately prior to the effective time and seven (7) additional members of the IBKC board of directors as of immediately prior to the effective time, designated by IBKC (collectively, the “continuing IBKC directors” and, each, a “continuing IBKC director”).

Chairman of the Board and Chief Executive Officer

Immediately following the effective time, D. Bryan Jordan, the current Chairman of the Board, President and Chief Executive Officer of First Horizon and First Horizon Bank, will continue to serve as President and Chief Executive Officer of the combined company and the combined bank. Immediately following the effective time, Daryl G. Byrd, current President and Chief Executive Officer of IBKC, will become the Executive Chairman of the boards of directors of the combined company and the combined bank until the second (2nd) anniversary of the closing date or any such earlier date as of which Mr. Byrd ceases for any reason to serve in the position of Executive Chairman, at which time Mr. Jordan will succeed Mr. Byrd as the Chairman of the boards of directors of the combined company and the combined bank. Thereafter, Mr. Byrd will serve as a senior advisor to the combined company and to the combined bank until the fifth (5th) anniversary of the closing date.

Management Team

Immediately following the effective time, in addition to the positions held by Mr. Jordan and Mr. Byrd described above, the officers of the combined company and/or the combined bank will include William C. Losch III, as Chief Financial Officer of the combined company and the combined bank, Michael Brown, as President, Regional Banking, of the combined bank, David Popwell, as President, Specialty Banking, of the combined bank, Anthony Restel, as Chief Operating Officer of the combined company and the combined bank, Susan Springfield, as Chief Credit Officer of the combined company and the combined bank, Beth Ardoin, as Chief Communications Officer of the combined company and the combined bank, Vernon H. Stafford, as Chief Audit Executive of the combined company and the combined bank and Terry Akins, as Chief Risk Officer of the combined company and the combined bank.

Lead Director

Immediately following the effective time and until Mr. Jordan succeeds Mr. Byrd as Chairman of the board of directors of the combined company and the combined bank, the lead independent director (the “lead director”) of the board of directors of the combined company and the combined bank will be an independent director chosen by the continuing First Horizon Directors from among the continuing First Horizon directors. Following the date on which Mr. Jordan succeeds Mr. Byrd as Chairman of the board of directors of the combined company and until the third (3rd) anniversary of the closing date, the lead director will be an independent director chosen by the majority of the continuing IBKC directors from among the continuing IBKC directors, and thereafter will serve in that capacity until replaced by a majority vote of the entire board of directors of the combined company.

Composition of Committees

Immediately following the effective time and until the expiration date, (i) each committee of the boards of directors of the combined company and combined bank will, to the fullest extent

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practicable, have at least five (5) members, (ii) each committee of the boards of directors of the combined company and combined bank will have a number of continuing IBKC directors that is one (1) less than the number of continuing First Horizon directors serving on each such committee, (iii) the chair of the Compensation Committee will be a director selected from among the continuing IBKC directors by majority vote of the continuing IBKC directors, and (iv) the chair of the Executive and Risk Committee will be (A) until the date on which Mr. Jordan succeeds Mr. Byrd as Chairman of the boards of directors of the combined company and the combined bank, a director selected from among the continuing IBKC directors by a majority vote of the continuing IBKC directors, and (B) thereafter, a director selected from among the continuing First Horizon directors by a majority vote of the continuing First Horizon directors.

Headquarters of the Combined Company and the Combined Bank After the Merger

Immediately following the effective time, the headquarters of the combined company and the combined bank will be located in Memphis, Tennessee. Following the effective time and until the expiration date, the headquarters for the combined company’s and the combined bank’s regional banking business will be located in New Orleans, Louisiana.

Commitments to the Community (page 135)

Prior to the closing date, IBKC will use its reasonable best efforts to establish a new charitable foundation (the “Louisiana First Horizon Foundation”), focused on community support in Louisiana. The initial members of the board of trustees of the Louisiana First Horizon Foundation will be selected by the IBKC board of directors and the First Horizon board of directors prior to the closing date, with the First Horizon board of directors entitled to select one (1) initial member and the IBKC board of directors entitled to select the remaining initial members. On the closing date, the combined company will contribute to the Louisiana First Horizon Foundation an amount in cash equal to $20 million.

Regulatory Approvals (page 135)

First Horizon and IBKC have agreed to cooperate with each other and use reasonable best efforts to promptly prepare and file all documentation to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by the merger agreement (including the merger and the bank merger), and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all such governmental entities. These approvals include, among others, the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Tennessee Department of Financial Institutions (the “TDFI”).

Although neither First Horizon nor IBKC knows of any reason why it cannot obtain these regulatory approvals in a timely manner, First Horizon and IBKC cannot be certain when or if they will be obtained.

Expected Timing of the Merger

First Horizon and IBKC expect to consummate the merger in the second quarter of 2020.

Conditions to Complete the Merger (page 157)

As more fully described in this joint proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include:

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approval of the merger agreement and the First Horizon charter amendment by the holders of First Horizon common stock and approval of the merger agreement by the holders of IBKC common stock;

 

 

authorization for listing on the NYSE, subject to official notice of issuance, of the shares of First Horizon common stock and the rollover First Horizon depositary shares;

 

 

all regulatory authorizations, consents, orders and approvals from the Federal Reserve Board and the TDFI or such other approvals the failure of which to be obtained would reasonably be expected to have, individually or in the aggregate, a material adverse effect (the “requisite regulatory approvals”) having been obtained and remaining in full force and effect, and all statutory waiting periods in respect thereof having expired or been terminated, without the imposition of any materially burdensome regulatory condition;

 

 

effectiveness of the registration statement of which this joint proxy statement/prospectus is part;

 

 

no order, injunction or other legal restraint preventing the completion of the merger or making the completion of the merger, the bank merger or the other transactions contemplated by the merger agreement illegal;

 

 

subject to materiality standards provided in the merger agreement, the accuracy of the representations and warranties of First Horizon and IBKC in the merger agreement;

 

 

performance in all material respects by each of First Horizon and IBKC of its obligations, covenants and agreements under the merger agreement; and

 

 

receipt by each of IBKC and First Horizon of an opinion from counsel as to certain tax matters.

Termination of the Merger Agreement (page 158)

The merger agreement may be terminated at any time prior to the completion of the merger, whether before or after the receipt of the required vote to approve the merger agreement by First Horizon shareholders or IBKC shareholders, in the following circumstances:

 

 

by mutual written consent of First Horizon and IBKC;

 

 

by either First Horizon or IBKC if any governmental entity that must grant a requisite regulatory approval has denied approval of the merger or the bank merger and such denial has become final and nonappealable or any governmental entity of competent jurisdiction has issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the merger or the bank merger, unless the failure to obtain a requisite regulatory approval is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements under the merger agreement;

 

 

by either First Horizon or IBKC if the merger has not been completed on or before November 3, 2020 (the “termination date”), unless the failure of the merger to be completed by such date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations, covenants and agreements under the merger agreement;

 

 

by either First Horizon or IBKC (provided that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained in the merger agreement) if there is a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or any such representation or warranty ceases to be true) set forth in the merger agreement on the part of the other party which either individually or in the aggregate would constitute, if occurring or continuing on the date the merger is completed, the failure of a closing condition of the terminating party and which is

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not cured within forty-five (45) days following written notice to the party committing such breach, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the termination date);

 

 

by IBKC, if: (1) the First Horizon board of directors (i) withholds, withdraws, modifies or qualifies in a manner adverse to IBKC its recommendation in this joint proxy statement/prospectus that the holders of First Horizon common stock approve the merger agreement (the “First Horizon board recommendation”); (ii) fails to make the First Horizon board recommendation in this joint proxy statement/prospectus; (iii) adopts, approves, recommends or endorses an acquisition proposal (as defined below in “The Merger Agreement—Agreement Not to Solicit Other Offers” beginning on page 156) or publicly announces an intention to adopt, approve, recommend or endorse an acquisition proposal; (iv) fails to publicly and without qualification (A) recommend against any acquisition proposal or (B) reaffirm the First Horizon board recommendation within ten (10) business days (or such fewer number of days as remains prior to the First Horizon special meeting) after an acquisition proposal is made public or any request by IBKC to do so; or (v) publicly proposes to do any of the foregoing; or (2) First Horizon or the First Horizon board of directors breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to shareholder approval and the First Horizon board recommendation; or

 

 

by First Horizon, if: (1) the IBKC board of directors (i) withholds, withdraws, modifies or qualifies in a manner adverse to First Horizon its recommendation in this joint proxy statement/prospectus that the holders of IBKC common stock and holders of IBKC preferred stock approve the merger agreement (the “IBKC board recommendation”); (ii) fails to make the IBKC board recommendation in this joint proxy statement/prospectus; (iii) adopts, approves, recommends or endorses an acquisition proposal or publicly announces an intention to adopt, approve, recommend or endorse an acquisition proposal; (iv) fails to publicly and without qualification (A) recommend against any acquisition proposal or (B) reaffirm the IBKC board recommendation within ten (10) business days (or such fewer number of days as remains prior to the IBKC special meeting) after an acquisition proposal is made public or any request by First Horizon to do so; or (v) publicly proposes to do any of the foregoing; or (2) IBKC or the IBKC board of directors breaches in any material respect its obligations relating to non-solicitation of acquisition proposals or its obligations related to shareholder approval and the IBKC board recommendation.

Neither First Horizon nor IBKC is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of First Horizon common stock or IBKC common stock.

Termination Fee (page 159)

If the merger agreement is terminated under certain circumstances, including circumstances involving alternative acquisition proposals and changes in the recommendation of IBKC’s or First Horizon’s respective boards, IBKC or First Horizon may be required to pay a termination fee to the other equal to $156 million.

Accounting Treatment (page 135)

First Horizon and IBKC each prepare their respective financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The merger will be accounted for using the acquisition method of accounting, and First Horizon will be treated as the accounting acquirer.

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The Rights of Holders of IBKC Common Stock Will Change as a Result of the Merger (page 204)

The rights of holders of IBKC common stock are governed by Louisiana law and by the articles of incorporation and bylaws of IBKC. In the merger, holders of IBKC common stock will become holders of common stock of First Horizon, and their rights will be governed by Tennessee law and the First Horizon charter, as amended by the First Horizon charter amendment, and the bylaws of First Horizon, as amended by the First Horizon bylaw amendment. Holders of IBKC common stock will have different rights once they become holders of common stock of First Horizon due to differences between the IBKC governing documents and Louisiana law, on the one hand, and the First Horizon governing documents and Tennessee law, on the other hand. These differences are described in more detail under the section entitled “Comparison of Shareholders’ Rights” beginning on page 204.

Listing of First Horizon Common Stock and Rollover First Horizon Depositary Shares in Respect of Rollover First Horizon Preferred Stock; Delisting and Deregistration of IBKC Common Stock and Depositary Shares in Respect of IBKC Preferred Stock (page 176)

The shares of First Horizon common stock and rollover First Horizon depositary shares to be issued in the merger will be listed for trading on the NYSE. Following the merger, shares of First Horizon common stock will continue to be traded on the NYSE. In addition, following the merger, IBKC common stock and IBKC depositary shares will be delisted from the NASDAQ and deregistered under the Exchange Act.

The First Horizon Special Meeting (page 54)

The First Horizon special meeting will be held at First Horizon Building M-Level Auditorium 165 Madison Avenue Memphis, TN 38103 on April 24, 2020 at 10:00 AM, local time. At the First Horizon special meeting, holders of First Horizon common stock will be asked to vote on the following matters:

 

 

approve the First Horizon merger proposal;

 

 

approve the First Horizon charter amendment proposal;

 

 

approve the First Horizon compensation proposal; and

 

 

approve the First Horizon adjournment proposal.

You may vote at the First Horizon special meeting if you owned shares of First Horizon common stock at the close of business on February 24, 2020. As of February 24, 2020, there were 311,782,256 shares of First Horizon common stock outstanding, of which less than two percent (2%) were owned and entitled to be voted by First Horizon directors and executive officers and their affiliates. We currently expect that First Horizon’s directors and executive officers will vote their shares in favor of the First Horizon merger proposal and the First Horizon charter amendment proposal, although none of them has entered into any agreements obligating them to do so.

The First Horizon merger proposal will be approved if a majority of all the votes entitled to be cast on the proposal by the holders of First Horizon common stock are voted in favor of the proposal. The First Horizon charter amendment proposal, the First Horizon compensation proposal and the First Horizon adjournment proposal will each be approved if a majority of the votes cast at the First Horizon special meeting are voted in favor of such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the First Horizon special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the First Horizon merger proposal, it will have the same effect as a vote “AGAINST” the First Horizon merger proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the First Horizon special meeting or fail to instruct your bank or broker how to vote with respect to the First Horizon charter amendment proposal, the First Horizon compensation proposal or the First Horizon

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adjournment proposal, you will not be deemed to have cast a vote with respect to the First Horizon charter amendment proposal, the First Horizon compensation proposal or the First Horizon adjournment proposal, as applicable, and it will have no effect on the applicable proposal.

The IBKC Special Meeting (page 61)

The IBKC special meeting will be held at IBERIABANK, 601 Poydras Street, 20th Floor, New Orleans, Louisiana 70130 on April 24, 2020, at 10:00 AM, local time. At the IBKC special meeting, holders of IBKC common stock will be asked to vote on the following matters:

 

 

approve the IBKC merger proposal;

 

 

approve the IBKC compensation proposal; and

 

 

approve the IBKC adjournment proposal.

You may vote at the IBKC special meeting if you owned shares of IBKC common stock at the close of business on February 24, 2020. As of February 24, 2020, there were 52,583,117 shares of IBKC common stock outstanding, of which less than three percent (3%) were owned and entitled to be voted by IBKC directors and executive officers and their affiliates. We currently expect that IBKC’s directors and executive officers will vote their shares in favor of the IBKC merger proposal, although none of them has entered into any agreements obligating them to do so.

The IBKC merger proposal will be approved if a majority of all the votes entitled to be cast on the IBKC merger proposal by the holders of IBKC common stock are voted in favor of such proposal. The IBKC compensation proposal will be approved if a majority of the votes cast by the holders of IBKC common stock at the IBKC special meeting are voted in favor of such proposal. The IBKC adjournment proposal will be approved if the affirmative vote of a majority of the votes cast by holders of IBKC common stock are voted in favor of the proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the IBKC special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the IBKC merger proposal, it will have the same effect as a vote “AGAINST” the IBKC merger proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the IBKC special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the IBKC compensation proposal, you will not be deemed to have cast a vote with respect to the IBKC compensation proposal and it will have no effect on the IBKC compensation proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the IBKC special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the IBKC adjournment proposal, you will not be deemed to have cast a vote with respect to the IBKC adjournment proposal and it will have no effect on the IBKC adjournment proposal.

Litigation Relating to the Merger (page 142)

Following the public announcement of the merger agreement, purported stockholders of IBKC filed a putative class action lawsuit and three individual lawsuits against IBKC, the members of the IBKC board of directors, and in the case of the putative class action, against First Horizon. Two of the individual lawsuits were filed in the United States District Court for the Eastern District of New York (Hertz v. IBERIABANK et al., No. 1:20-cv-00267 (filed Jan. 16, 2020); Cooksey v. IBERIABANK et al., No. 1:20-cv-00431 (filed Jan. 26, 2020)) and the third was filed in the United States District Court for the Southern District of New York, (Wang v. IBERIABANK, et al., No. 1:20-cv-00105 (filed on Jan. 6, 2020)). The putative class action was filed in the United States District Court for the District of Delaware (Parshall v. IBERIABANK et al., No. 1:20-cv-00027 (Jan. 8, 2020)). The complaints contain similar allegations contending, among other things, that the registration statement on Form S-4 misstated or failed to disclose certain allegedly material information in violation of federal securities laws. The complaints seek injunctive relief enjoining the merger, attorneys and experts’ fees, and other remedies.

30


 

On March 9, 2020, a purported stockholder of First Horizon filed an individual lawsuit against First Horizon and members of the First Horizon board of directors in the United States District Court for the Western District of Tennessee (Bushansky v. First Horizon National Corp. et al., No. 2:20-cv-02170-JTF-cgc (filed Mar. 9, 2020)), alleging that the amended registration statement on Form S-4 omits or misrepresents allegedly material information in violation of federal securities laws. This complaint similarly seeks injunctive relief enjoining the merger, attorneys and experts’ fees, and other remedies.

Risk Factors (page 43)

In evaluating the merger agreement, the merger or the issuance of shares of First Horizon common stock and rollover First Horizon depositary shares, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 43.

31


 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF FIRST HORIZON

The following table presents selected historical consolidated financial data for First Horizon as of and for the dates indicated. The selected consolidated financial data presented below as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 is derived from First Horizon’s audited consolidated financial statements incorporated by reference into this joint proxy statement/prospectus. The selected consolidated financial data as of December 31, 2017, 2016 and 2015 and for the years ended December 31, 2016 and 2015 is derived from First Horizon’s audited consolidated financial statements, which are not included or incorporated by reference in this joint proxy statement/prospectus. You should not assume the results of operations for past periods indicate results for any future period.

The following information should be read in conjunction with the historical audited consolidated financial statements of First Horizon and the related notes, including those contained in its Annual Report on Form 10-K for the year ended December 31, 2019 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for such Annual Report which is incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 222.

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions, except per share data)

 

As of and for the Years Ended December 31,

 

2019

 

2018

 

2017

 

2016

 

2015

Net Income

 

 

$

 

452.4

 

 

 

$

 

556.5

 

 

 

$

 

177.0

 

 

 

$

 

238.5

 

 

 

$

 

97.3

 

Income available to common shareholders

 

 

 

434.7

 

 

 

 

538.8

 

 

 

 

159.3

 

 

 

 

220.8

 

 

 

 

79.7

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock Data

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

$

 

1.39

 

 

 

$

 

1.66

 

 

 

$

 

0.66

 

 

 

$

 

0.95

 

 

 

$

 

0.34

 

Diluted earnings per common share

 

 

 

1.38

 

 

 

 

1.65

 

 

 

 

0.65

 

 

 

 

0.94

 

 

 

 

0.34

 

Cash dividend declared per common share

 

 

 

0.56

 

 

 

 

0.48

 

 

 

 

0.36

 

 

 

 

0.28

 

 

 

 

0.24

 

Book value per common share

 

 

 

15.04

 

 

 

 

13.79

 

 

 

 

12.82

 

 

 

 

9.90

 

 

 

 

9.42

 

Closing price of common stock per share:

 

 

 

 

 

 

 

 

 

 

High

 

 

 

17.28

 

 

 

 

20.61

 

 

 

 

20.76

 

 

 

 

20.61

 

 

 

 

16.20

 

Low

 

 

 

13.37

 

 

 

 

12.40

 

 

 

 

16.05

 

 

 

 

11.62

 

 

 

 

12.31

 

Year-end

 

 

 

16.56

 

 

 

 

13.16

 

 

 

 

19.99

 

 

 

 

20.01

 

 

 

 

14.52

 

Cash dividend per common share/year-end closing price

 

 

 

3.4

%

 

 

 

 

3.6

%

 

 

 

 

1.8

%

 

 

 

 

1.4

%

 

 

 

 

1.7

%

 

Cash dividends per common share/diluted earnings per common share

 

 

 

40.6

%

 

 

 

 

29.1

%

 

 

 

 

55.4

%

 

 

 

 

29.8

%

 

 

 

 

70.6

%

 

Price/earnings ratio

 

 

 

12.0

x

 

 

 

 

8.0

x

 

 

 

 

30.8

x

 

 

 

 

21.3

x

 

 

 

 

42.7

x

 

Market capitalization

 

 

$

 

5,157.9

 

 

 

$

 

4,192.4

 

 

 

$

 

6,531.5

 

 

 

$

 

4,674.8

 

 

 

$

 

3,464.3

 

Average shares (thousands)

 

 

 

313,637

 

 

 

 

324,375

 

 

 

 

241,436

 

 

 

 

232,700

 

 

 

 

234,189

 

Average diluted shares (thousands)

 

 

 

315,657

 

 

 

 

327,445

 

 

 

 

244,453

 

 

 

 

235,292

 

 

 

 

236,266

 

Period-end shares outstanding (thousands)

 

 

 

311,469

 

 

 

 

318,573

 

 

 

 

326,736

 

 

 

 

233,624

 

 

 

 

238,587

 

Volume of shares traded (thousands)

 

 

 

824,843

 

 

 

 

898,276

 

 

 

 

790,153

 

 

 

 

574,196

 

 

 

 

562,553

 

Selected Average Balances

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

$

 

41,744.3

 

 

 

$

 

40,225.5

 

 

 

$

 

29,924.8

 

 

 

$

 

27,427.2

 

 

 

$

 

25,636.0

 

Total loans, net of unearned income

 

 

 

29,188.6

 

 

 

 

27,213.8

 

 

 

 

20,104.0

 

 

 

 

18,303.9

 

 

 

 

16,624.4

 

Securities available-for-sale

 

 

 

4,500.1

 

 

 

 

4,718.3

 

 

 

 

4,021.6

 

 

 

 

4,002.1

 

 

 

 

3,692.3

 

Earnings assets

 

 

 

37,165.5

 

 

 

 

35,676.6

 

 

 

 

27,461.0

 

 

 

 

25,180.1

 

 

 

 

23,456.2

 

Total deposits

 

 

 

32,403.0

 

 

 

 

30,903.1

 

 

 

 

23,072.1

 

 

 

 

20,898.8

 

 

 

 

18,753.7

 

Total term borrowings

 

 

 

1,117.0

 

 

 

 

1,211.9

 

 

 

 

1,077.3

 

 

 

 

1,130.2

 

 

 

 

1,557.2

 

Common equity

 

 

 

4,529.8

 

 

 

 

4,226.5

 

 

 

 

2,579.3

 

 

 

 

2,300.4

 

 

 

 

2,190.1

 

Total equity

 

 

 

4,920.9

 

 

 

 

4,617.5

 

 

 

 

2,970.3

 

 

 

 

2,691.5

 

 

 

 

2,581.2

 

Selected Period-End Balances

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

$

 

43,310.9

 

 

 

$

 

40,832.3

 

 

 

$

 

41,423.4

 

 

 

$

 

28,555.2

 

 

 

$

 

26,192.6

 

Total loans, net of unearned income

 

 

 

31,061.1

 

 

 

 

27,535.5

 

 

 

 

27,658.9

 

 

 

 

19,589.5

 

 

 

 

17,686.5

 

Securities available-for-sale

 

 

 

4,445.4

 

 

 

 

4,626.5

 

 

 

 

5,170.3

 

 

 

 

3,943.5

 

 

 

 

3,929.8

 

Earnings assets

 

 

 

38,572.1

 

 

 

 

36,201.0

 

 

 

 

36,953.5

 

 

 

 

26,280.2

 

 

 

 

23,971.5

 

Total deposits

 

 

 

32,429.5

 

 

 

 

32,683.0

 

 

 

 

30,620.4

 

 

 

 

22,672.4

 

 

 

 

19,967.5

 

Total term borrowings

 

 

 

791.4

 

 

 

 

1,171.0

 

 

 

 

1,218.1

 

 

 

 

1,040.7

 

 

 

 

1,312.7

 

Common equity

 

 

 

4,685.0

 

 

 

 

4,394.3

 

 

 

 

4,189.4

 

 

 

 

2,314.0

 

 

 

 

2,248.5

 

Total equity

 

 

 

5,076.0

 

 

 

 

4,785.4

 

 

 

 

4,580.5

 

 

 

 

2,705.1

 

 

 

 

2,639.6

 

32


 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions, except per share data)

 

As of and for the Years Ended December 31,

 

2019

 

2018

 

2017

 

2016

 

2015

Selected Ratios

 

 

 

 

 

 

 

 

 

 

Return on average common equity(a)

 

 

 

9.60

%

 

 

 

 

12.75

%

 

 

 

 

6.18

%

 

 

 

 

9.60

%

 

 

 

 

3.64

%

 

Return on average tangible common equity(b)(c)

 

 

 

14.71

 

 

 

 

20.28

 

 

 

 

7.23

 

 

 

 

10.59

 

 

 

 

3.97

 

Return on average assets(d)

 

 

 

1.08

 

 

 

 

1.38

 

 

 

 

0.59

 

 

 

 

0.87

 

 

 

 

0.38

 

Net interest margin(e)

 

 

 

3.28

 

 

 

 

3.45

 

 

 

 

3.12

 

 

 

 

2.94

 

 

 

 

2.83

 

Allowance for loan losses to loans

 

 

 

0.64

 

 

 

 

0.66

 

 

 

 

0.69

 

 

 

 

1.03

 

 

 

 

1.19

 

Net charge-offs to average loans

 

 

 

0.09

 

 

 

 

0.06

 

 

 

 

0.06

 

 

 

 

0.10

 

 

 

 

0.19

 

Total period-end equity to period-end assets

 

 

 

11.72

 

 

 

 

11.72

 

 

 

 

11.06

 

 

 

 

9.47

 

 

 

 

10.08

 

Tangible common equity to tangible assets(c)

 

 

 

7.48

 

 

 

 

7.15

 

 

 

 

6.57

 

 

 

 

7.42

 

 

 

 

7.82

 

Common equity tier 1 ratio

 

 

 

9.20

 

 

 

 

9.77

 

 

 

 

8.88

 

 

 

 

9.94

 

 

 

 

10.45

 

Certain numbers may not add to total due to rounding.

 

 

(a)

 

Calculated using net income available to common shareholders divided by average common equity.

 

(b)

 

Calculated using net income available to common shareholders divided by average tangible common equity.

 

(c)

 

Represents a non-GAAP measure. Reconciliation appears below.

 

(d)

 

Calculated using net income divided by average assets.

 

(e)

 

Calculated using total net interest income adjusted for fully taxable equivalent assuming a statutory federal income tax rate of 21 percent in 2019 and 2018 and 35 percent prior to 2018, and, where applicable, state income taxes.

Non-GAAP to GAAP Reconciliation

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

As of and for the Years Ended December 31,

 

2019

 

2018

 

2017

 

2016

 

2015

Tangible Common Equity (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

(A) Total equity (GAAP)

 

 

$

 

5,076.0

 

 

 

$

 

4,785.4

 

 

 

$

 

4,580.5

 

 

 

$

 

2,705.1

 

 

 

$

 

2,639.6

 

Less: Noncontrolling interest(a)

 

 

 

295.4

 

 

 

 

295.4

 

 

 

 

295.4

 

 

 

 

295.4

 

 

 

 

295.4

 

Less: Preferred Stock(a)

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

 

 

 

 

 

 

 

 

Total common equity

 

 

 

4,685.0

 

 

 

 

4,394.3

 

 

 

 

4,189.4

 

 

 

 

2,314.0

 

 

 

 

2,248.5

 

Less: Intangible assets (GAAP)(b)

 

 

 

1,563.0

 

 

 

 

1,587.8

 

 

 

 

1,571.2

 

 

 

 

212.4

 

 

 

 

217.5

 

 

 

 

 

 

 

 

 

 

 

 

(B) Tangible common equity (Non-GAAP)

 

 

$

 

3,122.0

 

 

 

$

 

2,806.5

 

 

 

$

 

2,618.2

 

 

 

$

 

2,101.6

 

 

 

$

 

2,031.0

 

Tangible Assets (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

(C) Total assets (GAAP)

 

 

$

 

43,310.9

 

 

 

$

 

40,832.3

 

 

 

$

 

41,423.4

 

 

 

$

 

28,555.2

 

 

 

$

 

26,192.6

 

Less: Intangible assets (GAAP)(b)

 

 

 

1,563.0

 

 

 

 

1,587.8

 

 

 

 

1,571.2

 

 

 

 

212.4

 

 

 

 

217.5

 

 

 

 

 

 

 

 

 

 

 

 

(D) Tangible assets (Non-GAAP)

 

 

$

 

41,747.9

 

 

 

$

 

39,244.4

 

 

 

$

 

39,852.1

 

 

 

$

 

28,342.8

 

 

 

$

 

25,975.1

 

 

 

 

 

 

 

 

 

 

 

 

Average Tangible Common Equity (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

Average total equity (GAAP)

 

 

$

 

4,920.9

 

 

 

$

 

4,617.5

 

 

 

$

 

2,970.3

 

 

 

$

 

2,691.5

 

 

 

$

 

2,581.2

 

Less: Average noncontrolling interest(a)

 

 

 

295.4

 

 

 

 

295.4

 

 

 

 

295.4

 

 

 

 

295.4

 

 

 

 

295.4

 

Less: Average preferred stock(a)

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

95.6

 

 

 

 

 

 

 

 

 

 

 

 

(E) Total average common equity

 

 

 

4,529.8

 

 

 

 

4,226.5

 

 

 

 

2,579.3

 

 

 

 

2,300.4

 

 

 

 

2,190.1

 

Less: Average intangible assets (GAAP)(b)

 

 

 

1,575.3

 

 

 

 

1,570.0

 

 

 

 

376.3

 

 

 

 

214.9

 

 

 

 

183.1

 

 

 

 

 

 

 

 

 

 

 

 

(F) Average tangible common equity (Non-GAAP)

 

 

$

 

2,954.5

 

 

 

$

 

2,656.5

 

 

 

$

 

2,203.0

 

 

 

$

 

2,085.5

 

 

 

$

 

2,007.0

 

Net Income Available to Common Shareholders

 

 

 

 

 

 

 

 

 

 

(G) Net income available to common shareholders

 

 

$

 

434.7

 

 

 

$

 

538.8

 

 

 

$

 

159.3

 

 

 

$

 

220.8

 

 

 

$

 

79.7

 

Ratios

 

 

 

 

 

 

 

 

 

 

(A)/(C) Total equity to total assets (GAAP)

 

 

 

11.72

%

 

 

 

 

11.72

%

 

 

 

 

11.06

%

 

 

 

 

9.47

%

 

 

 

 

10.08

%

 

(B)/(D) Tangible common equity to tangible assets (Non-GAAP)

 

 

 

7.48

%

 

 

 

 

7.15

%

 

 

 

 

6.57

%

 

 

 

 

7.42

%

 

 

 

 

7.82

%

 

(G)/(E) Return on average common equity (GAAP)

 

 

 

9.60

%

 

 

 

 

12.75

%

 

 

 

 

6.18

%

 

 

 

 

9.60

%

 

 

 

 

3.64

%

 

(G)/(F) Return on average tangible common equity (Non-GAAP)

 

 

 

14.71

%

 

 

 

 

20.28

%

 

 

 

 

7.23

%

 

 

 

 

10.59

%

 

 

 

 

3.97

%

 

Certain numbers may not add due to rounding.

 

 

(a)

 

Included in Total equity on the Consolidated Statements of Condition.

 

(b)

 

Includes goodwill and other intangibles assets, net of amortization.

33


 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF IBKC

The following table presents selected historical consolidated financial data for IBKC as of and for the dates indicated. The selected consolidated financial data presented below as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 is derived from IBKC’s audited consolidated financial statements incorporated by reference into this joint proxy statement/prospectus. The selected consolidated financial data as of December 31, 2017, 2016 and 2015 and for the years ended December 31, 2016 and 2015 is derived from IBKC’s audited consolidated financial statements, which are not included or incorporated by reference in this joint proxy statement/prospectus.

You should not assume the results of operations for past periods indicate results for any future period.

The following information should be read in conjunction with the historical audited consolidated financial statements of First Horizon and the related notes, including those contained in its Annual Report on Form 10-K for the year ended December 31, 2019 and the historical unaudited consolidated financial statements of IBKC and the related notes and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for such Annual Report which is incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 222.

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)(1)

 

As of and for the Years ended December 31,

 

2019

 

2018

 

2017

 

2016

 

2015

Net income

 

 

$

 

384,155

 

 

 

 

370,249

 

 

 

$

 

142,413

 

 

 

$

 

186,777

 

 

 

$

 

142,844

 

Income available to common shareholders

 

 

 

371,553

 

 

 

 

361,154

 

 

 

 

133,318

 

 

 

 

178,800

 

 

 

 

142,844

 

Common Stock Data

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

$

 

6.97

 

 

 

 

6.50

 

 

 

$

 

2.61

 

 

 

$

 

4.32

 

 

 

$

 

3.69

 

Diluted earnings per common share

 

 

 

6.92

 

 

 

 

6.46

 

 

 

 

2.59

 

 

 

 

4.30

 

 

 

 

3.68

 

Cash dividends declared per common share

 

 

 

1.76

 

 

 

 

1.56

 

 

 

 

1.46

 

 

 

 

1.40

 

 

 

 

1.36

 

Book value per common share

 

 

 

78.37

 

 

 

 

71.61

 

 

 

 

66.17

 

 

 

 

62.68

 

 

 

 

58.87

 

Selected Average Balances

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

$

 

31,377,868

 

 

 

 

29,578,026

 

 

 

$

 

24,480,656

 

 

 

$

 

20,321,234

 

 

 

$

 

18,402,706

 

Total loans and leases, net of unearned income

 

 

 

23,272,627

 

 

 

 

21,642,095

 

 

 

 

17,169,772

 

 

 

 

14,661,054

 

 

 

 

13,273,329

 

Securities available for sale

 

 

 

4,479,985

 

 

 

 

4,604,011

 

 

 

 

4,233,256

 

 

 

 

2,909,962

 

 

 

 

2,534,660

 

Earning assets

 

 

 

28,813,376

 

 

 

 

27,199,588

 

 

 

 

22,482,689

 

 

 

 

18,477,064

 

 

 

 

16,652,051

 

Total deposits

 

 

 

24,403,990

 

 

 

 

22,920,474

 

 

 

 

18,971,764

 

 

 

 

16,225,141

 

 

 

 

15,152,126

 

Total borrowings

 

 

 

2,233,084

 

 

 

 

2,444,236

 

 

 

 

1,760,180

 

 

 

 

1,230,382

 

 

 

 

814,231

 

Common equity

 

 

 

4,029,638

 

 

 

 

3,750,631

 

 

 

 

3,376,253

 

 

 

 

2,524,996

 

 

 

 

2,229,528

 

Total equity

 

 

 

4,233,581

 

 

 

 

3,882,728

 

 

 

 

3,508,350

 

 

 

 

2,637,594

 

 

 

 

2,261,034

 

Selected Period-End Balances

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

$

 

31,713,450

 

 

 

$

 

30,833,015

 

 

 

$

 

27,904,129

 

 

 

$

 

21,659,190

 

 

 

$

 

19,504,068

 

Total loans and leases, net of unearned income

 

 

 

24,021,499

 

 

 

 

22,519,815

 

 

 

 

20,078,181

 

 

 

 

15,064,971

 

 

 

 

14,327,428

 

Securities available for sale

 

 

 

3,993,360

 

 

 

 

4,783,579

 

 

 

 

4,590,062

 

 

 

 

3,446,097

 

 

 

 

2,800,286

 

Earning assets

 

 

 

29,068,322

 

 

 

 

28,263,439

 

 

 

 

25,585,919

 

 

 

 

19,963,230

 

 

 

 

17,775,545

 

Total deposits

 

 

 

25,219,349

 

 

 

 

23,763,431

 

 

 

 

21,466,717

 

 

 

 

17,408,283

 

 

 

 

16,178,748

 

Total borrowings

 

 

 

1,547,895

 

 

 

 

2,649,033

 

 

 

 

2,487,132

 

 

 

 

1,138,089

 

 

 

 

667,064

 

Common equity

 

 

 

4,108,249

 

 

 

 

3,924,180

 

 

 

 

3,564,694

 

 

 

 

2,807,597

 

 

 

 

2,422,023

 

Total equity

 

 

 

4,336,734

 

 

 

 

4,056,277

 

 

 

 

3,696,791

 

 

 

 

2,939,694

 

 

 

 

2,498,835

 

Selected Ratios(2)

 

 

 

 

 

 

 

 

 

 

Return on average common equity(3)

 

 

 

9.22

%

 

 

 

 

9.63

%

 

 

 

 

3.95

%

 

 

 

 

7.08

%

 

 

 

 

6.41

%

 

Return on average assets(4)

 

 

 

1.22

 

 

 

 

1.25

 

 

 

 

0.58

 

 

 

 

0.92

 

 

 

 

0.78

 

Net interest margin(5)(6)

 

 

 

3.45

 

 

 

 

3.75

 

 

 

 

3.64

 

 

 

 

3.56

 

 

 

 

3.58

 

Allowance for loan and lease losses to loans and leases at end of period

 

 

 

0.61

 

 

 

 

0.62

 

 

 

 

0.70

 

 

 

 

0.96

 

 

 

 

0.97

 

Net charge-offs to average loans and leases

 

 

 

0.13

 

 

 

 

0.15

 

 

 

 

0.33

 

 

 

 

0.23

 

 

 

 

0.08

 

Total period-end equity to period-end assets

 

 

 

13.67

 

 

 

 

13.16

 

 

 

 

13.25

 

 

 

 

13.57

 

 

 

 

12.81

 

Tangible common equity to tangible assets(7)

 

 

 

9.24

 

 

 

 

8.84

 

 

 

 

8.61

 

 

 

 

9.82

 

 

 

 

8.86

 

Common equity tier 1 ratio

 

 

 

10.52

 

 

 

 

10.72

 

 

 

 

10.57

 

 

 

 

11.84

 

 

 

 

10.10

 

N/A-not applicable

NM-not meaningful

34


 

 

 

(1)

 

The 2018 data is impacted by IBKC’s acquisition of Gibraltar Private Bank & Trust Company on March 23, 2018 and Solomon Parks Title & Escrow, LLC on January 12, 2018. The 2017 data is impacted by IBKC’s acquisition of Sabadell United Bank, N.A. on July 31, 2017. The 2015 data is impacted by IBKC’s acquisitions of Florida Bank Group, Inc. on February 28, 2015, Old Florida Bancshares, Inc. on March 31, 2015, and Georgia Commerce Bancshares, Inc. on May 31, 2015.

 

(2)

 

With the exception of end-of-period ratios, all ratios are based on average daily balances during the respective periods.

 

(3)

 

Calculated using net income available to common shareholders divided by average common equity.

 

(4)

 

Calculated using net income divided by average assets.

 

(5)

 

Calculated using the tax benefit associated with related income sources that are tax-exempt using a rate of 21% for 2019 and 2018 and a rate of 35% for prior years, which approximates the marginal tax rate.

 

(6)

 

Net interest margin represents net interest income as a percentage of average earning assets.

 

(7)

 

Represents a non-GAAP measure. Reconciliation to total equity to total assets (GAAP) appears below.

Certain numbers may not add to total due to rounding.

Non-GAAP to GAAP Reconciliation

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

As of and for the Years Ended December 31,

 

2019

 

2018

 

2017

 

2016

 

2015

Tangible Common Equity (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

(A) Total equity (GAAP)

 

 

$

 

4,336,734

 

 

 

$

 

4,056,277

 

 

 

$

 

3,696,791

 

 

 

$

 

2,939,694

 

 

 

$

 

2,498,835

 

Less: Preferred Stock(1)

 

 

 

228,485

 

 

 

 

132,097

 

 

 

 

132,097

 

 

 

 

132,097

 

 

 

 

76,812

 

Total common equity

 

 

 

4,108,249

 

 

 

 

3,924,180

 

 

 

 

3,564,694

 

 

 

 

2,807,597

 

 

 

 

2,422,023

 

Less: Intangible assets (GAAP)(2)

 

 

 

1,297,095

 

 

 

 

1,315,462

 

 

 

 

1,271,807

 

 

 

 

755,765

 

 

 

 

761,871

 

(B) Tangible common equity (Non-GAAP)

 

 

 

2,811,154

 

 

 

 

2,608,718

 

 

 

 

2,292,887

 

 

 

 

2,051,832

 

 

 

 

1,660,152

 

Tangible Assets (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

(C) Total assets (GAAP)

 

 

$

 

31,713,450

 

 

 

$

 

30,833,015

 

 

 

$

 

27,904,129

 

 

 

$

 

21,659,190

 

 

 

$

 

19,504,068

 

Less: Intangible assets (GAAP)(2)

 

 

 

1,297,095

 

 

 

 

1,315,462

 

 

 

 

1,271,807

 

 

 

 

755,765

 

 

 

 

761,871

 

(D) Tangible assets (Non-GAAP)

 

 

 

30,416,355

 

 

 

 

29,517,553

 

 

 

 

26,632,322

 

 

 

 

20,903,425

 

 

 

 

18,742,197

 

Ratios

 

 

 

 

 

 

 

 

 

 

(A)/(C) Total equity to total assets (GAAP)

 

 

 

13.67

%

 

 

 

 

13.16

%

 

 

 

 

13.25

%

 

 

 

 

13.57

%

 

 

 

 

12.81

%

 

(B)/(D) Tangible common equity to tangible assets (Non-GAAP)

 

 

 

9.24

%

 

 

 

 

8.84

%

 

 

 

 

8.61

%

 

 

 

 

9.82

%

 

 

 

 

8.86

%

 

 

 

(1)

 

Included in total shareholders’ equity on the Consolidated Balance Sheets.

 

(2)

 

Includes goodwill and other acquisition-related intangible assets, net of amortization.

Certain numbers may not add to total due to rounding.

35


 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

The following tables show unaudited pro forma financial information about the financial condition and results of operations, including per share data, after giving effect to the merger between First Horizon and IBKC as well as the purchase of certain branches of SunTrust Bank by First Horizon (the “SunTrust Purchase”) and other pro forma adjustments. The unaudited pro forma financial information assumes that the IBKC merger and the SunTrust Purchase are accounted for under the acquisition method of accounting, and the assets and liabilities of IBKC and the purchased branches of SunTrust Bank will generally be recorded by First Horizon at their respective fair values as of the date the transactions were or are (as applicable) completed. The unaudited pro forma combined balance sheet gives effect to the transactions as if the transactions had occurred on December 31, 2019. The unaudited pro forma combined income statement for the year ended December 31, 2019, gives effect to the transactions as if the transactions had become effective at January 1, 2019. The unaudited selected pro forma combined financial information has been derived from and should be read in conjunction with the consolidated financial statements and related notes of First Horizon, which are incorporated in this joint proxy statement/prospectus by reference, the consolidated financial statements and related notes of IBKC, which are incorporated in this joint proxy statement/prospectus by reference, and the more detailed unaudited pro forma condensed combined financial information, including the notes thereto, appearing elsewhere in this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 222 and “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 166.

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined at the beginning of the period presented, nor the impact of possible business model changes. The unaudited pro forma condensed combined financial information also does not consider any potential effects of changes in market conditions on revenues, expense efficiencies, asset dispositions, and share repurchases, among other factors, including those discussed in the section entitled “Risk Factors” beginning on page 44. In addition, as explained in more detail in the accompanying notes to the “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 166, the preliminary allocations of the pro forma purchase prices reflected in the unaudited pro forma condensed combined financial information are subject to adjustment and may vary materially from the actual purchase price allocations that will be recorded upon completion of the merger and the SunTrust Purchase.

The risk of such variance is particularly significant with respect to the allocation of the purchase price for the merger, because such allocation is based, in large part, on First Horizon’s price per common share as of the closing date. Specifically, the preliminary allocation of the pro forma purchase price for the merger reflected in the unaudited pro forma condensed combined financial information assumes a price per common share of $13.33, the trading price of First Horizon’s common stock as of market close on February 28, 2020. Since February 28, 2020 the financial, commodities (including oil and gas) and other markets generally have experienced extreme volatility due to, in large part, the coronavirus pandemic. Such volatility has resulted in a significant drop in the trading price of First Horizon common stock, which, as of market close on March 18, 2020, was $7.18, a 46% decline from the February 28, 2020 market close trading price. The continuation of this volatility of financial, commodities (including oil and gas) and other markets generally and its continued effect on the trading price of First Horizon common stock will largely depend on future developments, which we cannot accurately predict, including new information which may emerge concerning the severity of the coronavirus pandemic, the success of governmental and private actions taken to contain or treat the coronavirus pandemic, and reactions by consumers, companies, governmental entities, and financial, commodities (including oil and gas) and other markets to such actions. Given this volatility and uncertainty as to whether such markets, and the trading price of First Horizon common stock, will stabilize or return to pre-coronavirus pandemic levels, the unaudited pro forma financials of the combined company included in this joint proxy

36


 

statement/prospectus may not be indicative of the combined company’s actual financial condition as of the closing date.

 

 

 

(Dollars in thousands)

 

Year Ended
December 31, 2019

Statements of Income

 

 

Net interest income

 

 

$

 

2,264,591

 

Provision for loan losses

 

 

 

88,657

 

 

 

 

Net interest income after provision for loan losses

 

 

 

2,175,934

 

Noninterest income

 

 

 

909,306

 

Noninterest expense

 

 

 

1,966,538

 

 

 

 

Income before income taxes

 

 

 

1,118,702

 

Income taxes

 

 

 

256,953

 

 

 

 

Net income

 

 

$

 

861,749

 

 

 

 

 

 

 

 

 

As of
December 31, 2019

Balance Sheet

 

 

Investment securities

 

 

$

 

8,578,662

 

Total net loans

 

 

 

55,111,525

 

Goodwill

 

 

 

1,866,172

 

Total assets

 

 

 

76,417,540

 

Deposits

 

 

 

59,953,652

 

Term borrowings

 

 

 

2,102,533

 

Shareholders’ equity

 

 

 

8,231,764

 

For the sole purpose of illustrating the effect of various trading prices of First Horizon common stock on certain items of the unaudited pro forma financials of the combined company, the below “Hypothetical Illustration of First Horizon Common Stock Trading Price Impact on Selected December 31, 2019 Pro Forma Financial Information” table sets out the hypothetical value of the total merger consideration per share of IBKC common stock, goodwill, and shareholders’ equity, based on various hypothetical trading prices of First Horizon common stock. This illustration is intended to show the effect on those measures if the trading price of First Horizon’s common stock as of February 28, 2020 had differed from $13.33 (the actual trading price of First Horizon common stock as of February 28, 2020 and the trading price used to calculate the pro forma purchase price of the merger), with all other information used to create the unaudited pro forma condensed combined financial information held constant. This illustration does not show how the pro forma presentation would have changed if loan, deposit, investment, and other values had been re-assessed as of any other date. Variation in loan, deposit, investment, and other values over time can significantly affect the pro forma presentation, and, as such, the calculations of goodwill and shareholders’ equity at the applicable trading prices set forth below are not necessarily indicative of, and may materially vary from, the combined company’s actual goodwill and shareholders’ equity as of the closing date.

Hypothetical Illustration of First Horizon Common Stock Trading Price Impact on Selected December 31, 2019 Pro Forma Financial Information

 

 

 

 

 

 

 

FHN Common Stock Trading Price(a)

 

Total Merger Consideration
Per Share of IBKC Common Stock

 

Goodwill

 

Shareholders’ Equity

$18.00

 

 

$

 

82.51

 

 

 

$

 

2,950,101

 

 

 

$

 

9,365,613

 

$16.00

 

 

$

 

73.34

 

 

 

$

 

2,463,507

 

 

 

$

 

8,880,025

 

$14.00

 

 

$

 

64.18

 

 

 

$

 

1,976,915

 

 

 

$

 

8,394,437

 

$12.00

 

 

$

 

55.01

 

 

 

$

 

1,490,323

 

 

 

$

 

7,908,848

 

$10.00

 

 

$

 

45.84

 

 

 

$

 

1,432,787

(b)

 

 

 

$

 

7,852,319

(b)

 

$8.00

 

 

$

 

36.67

 

 

 

$

 

1,432,787

(b)

 

 

 

$

 

7,853,324

(b)

 

37


 

 

 

(a)

 

Range of First Horizon common stock trading prices is for illustrative purposes only and the First Horizon common stock trading price as of the closing of the merger may fall outside the range set forth in this table.

 

(b)

 

At such stock price, hypothetical goodwill of the merger is less than zero resulting in a purchase accounting gain which is reflected as an increase in shareholders’ equity.

38


 

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The historical per share data for First Horizon common stock and IBKC common stock below has been derived from the audited consolidated financial statements of each of First Horizon and IBKC as of and for the year ended December 31, 2019, which is incorporated by reference herein.

The unaudited pro forma combined per share data set forth below gives effect to the merger as if it had occurred on January 1, 2019, the beginning of the earliest period presented, in the case of continuing net income per share data, and as of December 31, 2019 in the case of book value per share data, assuming that each outstanding share of IBKC common stock had been converted into shares of First Horizon common stock based on the exchange ratio of 4.584 shares of First Horizon common stock for each share of IBKC common stock. The unaudited pro forma combined per share data has been derived from the audited consolidated financial statements for each of First Horizon and IBKC as of and for the year ended December 31, 2019.

The unaudited pro forma combined per share data has been derived using the acquisition method of accounting. See “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 166 for more information. Accordingly, the pro forma adjustments reflect the assets and liabilities of IBKC and the purchased branches of SunTrust Bank at their preliminary estimated fair values. Differences between these preliminary estimates and the final values in acquisition accounting will occur and these differences could have a material impact on the unaudited pro forma combined per share information set forth below.

The unaudited pro forma combined per share data does not purport to represent the actual results of operations that the combined company would have achieved had the merger been completed during these periods or to project the future results of operations that the combined company may achieve after the merger and asset purchase.

The unaudited pro forma combined per share equivalent data set forth below shows the effect of the merger from the perspective of a holder of IBKC common stock. The information was calculated by multiplying the unaudited pro forma combined per share data by the exchange ratio of 4.584.

You should read the information below in conjunction with the selected consolidated historical financial data included elsewhere in this joint proxy statement/prospectus and the historical consolidated financial statements of First Horizon and IBKC and related notes that have been filed with the SEC, certain of which are incorporated by reference herein. See “Selected Consolidated Historical Financial Data of First Horizon”, “Selected Consolidated Historical Financial Data of IBKC” and “Where You Can Find More Information” beginning on pages 32, 34, and 222, respectively. The unaudited pro forma combined per share data and the unaudited pro forma combined per share equivalent data has been derived from, and should be read in conjunction with, the unaudited pro forma combined financial information and related notes included in this joint proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 166, which are based on and should be read in conjunction with (i) the historical audited consolidated financial statements of First Horizon and the related notes included in First Horizon’s Annual Report on Form 10-K for the year ended December 31, 2019 which is incorporated by reference herein, and (ii) the historical audited consolidated financial statements of IBKC and the related notes included in IBKC’s Annual Report on Form 10-K for the year ended December 31, 2019 and 2018 which is incorporated by reference herein.

39


 

 

 

 

 

 

 

 

 

 

 

 

 

 

First
Horizon
(As reported)

 

Pro Forma
First
Horizon
including
SunTrust
Purchase
(a)

 

IBKC
(As reported)

 

Pro Forma
First
Horizon
including
SunTrust
Purchase and
IBKC
(a)

 

Pro Forma
Equivalent
Per Share of
IBKC Common
Stock
(b)

For the year ended December 31, 2019:

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

$

 

1.39

 

 

 

$

 

1.40

 

 

 

$

 

6.97

 

 

 

$

 

1.50

 

 

 

$

 

6.88

 

Diluted earnings per share

 

 

 

1.38

 

 

 

 

1.39

 

 

 

 

6.92

 

 

 

 

1.49

 

 

 

 

6.83

 

Cash dividends(c)

 

 

 

0.56

 

 

 

 

0.56

 

 

 

 

1.76

 

 

 

 

0.56

 

 

 

 

2.57

 

Book value at December 31, 2019(d)

 

 

 

15.04

 

 

 

 

15.04

 

 

 

 

78.37

 

 

 

 

14.24

 

 

 

 

65.28

 

 

 

(a)

 

Pro forma earnings per share are based on pro forma combined net income and pro forma combined weighted average common shares outstanding at the end of the period.

 

(b)

 

Pro forma equivalent per share information is calculated based on pro forma combined data multiplied by the applicable exchange ratio of 4.584.

 

(c)

 

Pro forma dividends per share represents First Horizon’s historical dividends per share.

 

(d)

 

Book value per common share is calculated based on pro forma combined equity and pro forma combined common shares outstanding at the end of the period.

40


 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained or incorporated by reference into this joint proxy statement/prospectus are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as “anticipate,” “estimate,” “continue,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “objective,” “goal,” “positions,” “prospects,” “potential,” “will,” “would,” “should,” “could,” “may” and words and terms of similar substance used in connection with any discussions regarding timing of completion of the merger, expected benefits of the merger and the future operating or financial performance of First Horizon, IBKC or the combined company identify forward-looking statements. All forward-looking statements are management’s present expectations or forecasts of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In addition to the factors relating to the merger discussed under the caption “Risk Factors” beginning on page 43 and the factors previously disclosed in First Horizon’s and IBKC’s reports filed with the SEC, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:

 

 

the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the merger agreement;

 

 

the outcome of pending or threatened litigation, or of matters before regulatory agencies, whether currently existing or commencing in the future, including litigation related to the merger;

 

 

delays in completing the transaction;

 

 

the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) and shareholder approvals or to satisfy any of the other conditions to the completion of the merger on a timely basis or at all;

 

 

the possibility that the anticipated benefits of the transaction are not 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 IBKC do business;

 

 

certain restrictions during the pendency of the merger that may impact the parties’ ability to pursue certain business opportunities or strategic transactions;

 

 

the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

 

 

the impact of purchase accounting with respect to the merger, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;

 

 

diversion of management’s attention from ongoing business operations and opportunities;

 

 

ability of management to execute their respective business plans and strategies and manage the risks involved with consummating the transaction;

 

 

potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction;

 

 

the ability to complete the transaction and integration of First Horizon and IBKC successfully, which may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to First Horizon’s or IBKC’s existing businesses;

 

 

the challenges of integrating, retaining and hiring key personnel;

41


 

 

 

failure to attract new customers and retain existing customers in the manner anticipated;

 

 

the effect of divestitures that may be required by regulatory authorities in certain markets in which First Horizon and IBKC compete;

 

 

any interruption or breach of security as a result of systems integration resulting in failures or disruptions in customer account management, general ledger, deposit, loan or other systems;

 

 

changes in First Horizon’s stock price before closing, including as a result of the financial performance of IBKC prior to closing;

 

 

the dilution caused by First Horizon’s issuance of additional shares of its capital stock in connection with the transaction;

 

 

operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which First Horizon and IBKC are highly dependent;

 

 

changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental or legislative action and other changes pertaining to banking, securities, taxation and financial accounting and reporting, environmental protection and insurance, and the ability to comply with such changes in a timely manner;

 

 

changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Department of the Treasury and the Federal Reserve Board;

 

 

changes in interest rates, which may affect First Horizon’s or IBKC’s net income and other future cash flows, or the market value of First Horizon’s or IBKC’s assets, including its investment securities;

 

 

changes in accounting principles, policies, practices or guidelines;

 

 

changes in First Horizon’s credit ratings or in First Horizon’s ability to access the capital markets;

 

 

natural disasters, war or terrorist activities, or pandemics, or the outbreak of COVID-19 or similar outbreaks, and their effects on economic and business environments in which First Horizon and IBKC operate; and

 

 

other economic, competitive, governmental, regulatory, technological and geopolitical factors affecting First Horizon’s or IBKC’s operations, pricing and services.

For any forward-looking statements made in this joint proxy statement/prospectus or in any documents incorporated by reference into this joint proxy statement/prospectus, First Horizon and IBKC claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this joint proxy statement/prospectus or the dates of the documents incorporated by reference in this joint proxy statement/prospectus. Except as required by applicable law, neither First Horizon nor IBKC undertakes to update these forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made.

For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that First Horizon and IBKC have filed with the SEC as described under “Where You Can Find More Information” beginning on page 222.

We expressly qualify in their entirety all forward-looking statements attributable to either of us or any person acting on our behalf by the cautionary statements contained or referred to in this joint proxy statement/prospectus.

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 41, you should carefully consider the following risk factors in deciding whether to vote for the approval of the merger agreement and, for the First Horizon shareholders, the approval of the First Horizon charter amendment proposal.

Because the market price of First Horizon common stock may fluctuate, holders of IBKC common stock cannot be certain of the market value of the merger consideration they will receive.

In the merger, each share of IBKC common stock issued and outstanding immediately prior to the effective time (other than certain shares held by First Horizon or IBKC) will be converted into 4.584 shares of First Horizon common stock. This exchange ratio is fixed and will not be adjusted for changes in the market price of either First Horizon common stock or IBKC common stock. Changes in the price of First Horizon common stock between now and the time of the merger will affect the value that holders of IBKC common stock will receive in the merger. Neither First Horizon nor IBKC is permitted to terminate the merger agreement as a result of any increase or decrease in the market price of First Horizon common stock or IBKC common stock.

Stock price changes may result from a variety of factors, including general market and economic conditions, changes in IBKC’s and First Horizon’s businesses, operations and prospects, the recent volatility in the prices of securities in global financial markets, including market prices of IBKC, First Horizon and other banking companies, the recent pandemic of the novel strain of coronavirus (COVID-19) and regulatory considerations, many of which factors are beyond IBKC’s and First Horizon’s control. Therefore, at the time of the First Horizon special meeting and the IBKC special meeting, holders of First Horizon common stock and holders of IBKC common stock will not know the market value of the consideration that IBKC shareholders will receive at the effective time. You should obtain current market quotations for shares of First Horizon common stock and for shares of IBKC common stock.

The market price of First Horizon common stock after the merger may be affected by factors different from those affecting the shares of IBKC common stock or First Horizon common stock currently.

In the merger, holders of IBKC common stock will become holders of First Horizon common stock. First Horizon’s business differs from that of IBKC. Accordingly, the results of operations of the combined company and the market price of First Horizon common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of each of First Horizon and IBKC. For a discussion of the businesses of First Horizon and IBKC and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this joint proxy statement/prospectus and referred to under “Where You Can Find More Information” beginning on page 222.

The fairness opinions delivered by Morgan Stanley and KBW and Goldman Sachs, respectively, to First Horizon’s and IBKC’s respective boards of directors prior to the entry into the merger agreement will not reflect changes in circumstances that may have occurred since the dates of the opinions.

The respective boards of directors of First Horizon and IBKC have not obtained updated fairness opinions either as of the date of this joint proxy statement/prospectus or as of any other date subsequent to the dates of such opinions from Morgan Stanley, which is First Horizon’s financial advisor, or from KBW or Goldman Sachs, each of which is IBKC’s financial advisor. Changes in the operations and prospects of First Horizon or IBKC, general market and economic conditions and other factors which may be beyond the control of First Horizon and IBKC, including the recent pandemic of coronavirus (COVID-19) that has caused higher than normal volatility in the financial

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markets generally, and the market prices of First Horizon and IBKC, may have altered the value of First Horizon or IBKC or the prices of shares of First Horizon common stock and shares of IBKC common stock as of the date of this joint proxy statement/prospectus, or may alter such values and prices by the time the merger is completed. The opinions do not speak as of any date other than the dates of those opinions.

Combining First Horizon and IBKC may be more difficult, costly or time consuming than expected and First Horizon and IBKC may fail to realize the anticipated benefits of the merger.

The success of the merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of First Horizon and IBKC. To realize the anticipated benefits and cost savings from the merger, which are expected to be approximately $170 million in annual pre-tax cost savings (primarily resulting from redundancies in areas such as general overhead, bank branches, operations and computer services), First Horizon and IBKC must integrate and combine their businesses in a manner that permits those cost savings to be realized, without adversely affecting current revenues and future growth. If First Horizon and IBKC are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings of the merger could be less than anticipated, and integration may result in additional and unforeseen expenses. For more information, see “Unaudited Pro Forma Condensed Combined Financial Statements—Note 5—Estimated Cost Savings and Merger Integration Costs” beginning on page 174.

An inability to realize the full extent of the anticipated benefits of the merger and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the combined company, which may adversely affect the value of the common stock of the combined company after the completion of the merger.

First Horizon and IBKC have operated and, until the completion of the merger, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of First Horizon and IBKC during this transition period and for an undetermined period after completion of the merger on the combined company.

Furthermore, the board of directors and executive leadership of the combined company will consist of former directors and executive officers from each of First Horizon and IBKC. Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and philosophies.

The combined company may be unable to retain First Horizon and/or IBKC personnel successfully after the merger is completed.

The success of the merger will depend in part on the combined company’s ability to retain the talents and dedication of key employees currently employed by First Horizon and IBKC. It is possible that these employees may decide not to remain with First Horizon or IBKC, as applicable, while the merger is pending or with the combined company after the merger is consummated. If First Horizon and IBKC are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, First Horizon and IBKC could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, if key employees terminate their employment, the combined company’s business activities may be adversely affected and management’s attention may be diverted from successfully integrating First Horizon and IBKC to

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hiring suitable replacements, all of which may cause the combined company’s business to suffer. In addition, First Horizon and IBKC may not be able to locate or retain suitable replacements for any key employees who leave either company. For more information, see “Governance of the Combined Company After the Merger—Chairman of the Board and Chief Executive Officer” and “Governance of the Combined Company After the Merger—Management Team” each beginning on pages 133 and 134.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.

Before the merger and the bank merger may be completed, various approvals, consents and non-objections must be obtained from the Federal Reserve Board and various other bank regulatory, antitrust, insurance and other authorities in the United States. In determining whether to grant these approvals, such regulatory authorities consider a variety of factors, including the regulatory standing of each party and the factors described under “The Merger—Regulatory Approvals” beginning on page 135. These approvals could be delayed or not obtained at all, including due to: an adverse development in either party’s regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally. The Federal Reserve Board has stated that if material weaknesses are identified by examiners before a banking organization applies to engage in expansionary activity, the Federal Reserve Board will expect the banking organization to resolve all such weaknesses before applying for such expansionary activity. The Federal Reserve Board has also stated that if issues arise during the processing of an application for expansionary activity, it will expect the applicant banking organization to withdraw its application pending resolution of any supervisory concerns.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the merger agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the merger or otherwise reduce the anticipated benefits of the merger if the merger were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the merger. Additionally, the completion of the merger is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.

In addition, despite the parties’ commitments to use their reasonable best efforts to comply with conditions imposed by regulators, under the terms of the merger agreement, neither First Horizon nor IBKC will be required, and neither party will be permitted without the prior written consent of the other party, to take actions or agree to conditions that would reasonably be expected to have a material adverse effect on the combined company and its subsidiaries, taken as a whole, after giving effect to the merger. See “The Merger—Regulatory Approvals” beginning on page 135.

The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus is preliminary and the actual purchase price as well as the actual financial condition and results of operations of the combined company after the merger may differ materially.

The unaudited pro forma condensed combined financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and are not necessarily indicative of what the combined company’s actual financial condition or results of operations would have been

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had the merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information reflects adjustments, which are based upon preliminary estimates, to record the IBKC identifiable assets acquired and liabilities assumed at fair value and the resulting goodwill recognized. The purchase price allocation reflected in this document is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of IBKC as of the date of the completion of the merger. Financial markets generally, and the market prices of stock of First Horizon and IBKC, are experiencing higher than normal volatility and, therefore, the actual purchase price may vary significantly from the purchase price used in preparing the unaudited pro forma combined consolidated financial information in this document. Accordingly, the final acquisition accounting adjustments may differ materially from the pro forma adjustments reflected in this document. For more information, see “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 166.

Certain of First Horizon’s and IBKC’s directors and executive officers may have interests in the merger that may differ from the interests of holders of First Horizon common stock and holders of IBKC common stock.

Holders of First Horizon common stock and holders of IBKC common stock should be aware that some of First Horizon’s and IBKC’s directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of holders of First Horizon common stock and holders of IBKC common stock. These interests and arrangements may create potential conflicts of interest. The First Horizon and IBKC boards of directors were aware of these respective interests and considered these interests, among other matters, when making their decisions to approve the merger agreement, and in recommending that holders of common stock vote to approve the merger agreement. For a more complete description of these interests, please see “The Merger—Interests of Certain First Horizon Directors and Executive Officers in the Merger” beginning on page 116 and “The Merger—Interests of Certain IBKC Directors and Executive Officers in the Merger” beginning on page 122.

The merger agreement may be terminated in accordance with its terms and the merger may not be completed.

The merger agreement is subject to a number of conditions which must be fulfilled in order to complete the merger. Those conditions include: (i) the approval of the First Horizon merger proposal and the First Horizon charter amendment proposal by the requisite vote of the First Horizon shareholders; (ii) the approval of the IBKC merger proposal by the requisite vote of the IBKC shareholders; (iii) authorization for listing on the NYSE of the shares of First Horizon common stock and rollover First Horizon preferred stock (or depositary shares in respect thereof) to be issued in the merger; (iv) the receipt of all required regulatory approvals which are necessary to close the merger and the bank merger and the expiration of all statutory waiting periods without the imposition of any materially burdensome regulatory condition; (v) the effectiveness of the registration statement on Form S-4, of which this joint proxy statement/prospectus is a part, and the absence of a stop order or proceeding initiated or threatened by the SEC for that purpose; (vi) the absence of any order, injunction, decree or other legal restraint preventing the completion of the merger or any of the other transactions contemplated by the merger agreement or making the completion of the merger illegal; (vii) subject to certain exceptions, the accuracy of the representations and warranties of each party, generally subject to a material adverse effect qualification; (viii) the prior performance in all material respects by each party of the obligations required to be performed by it at or prior to the closing date; and (ix) receipt by each party of an opinion from its counsel to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code.

These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the merger may not be completed. In addition, the parties can mutually decide to terminate the merger agreement at any time, before or after shareholder approval, or First Horizon or IBKC may

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elect to terminate the merger agreement in certain other circumstances. See “The Merger Agreement—Termination of the Merger Agreement” beginning on page 158.

Failure to complete the merger could negatively impact First Horizon or IBKC.

If the merger agreement is not completed for any reason, including as a result of First Horizon shareholders failing to approve either the First Horizon merger proposal or the First Horizon charter amendment or IBKC shareholders failing to approve the IBKC merger proposal, there may be various adverse consequences and First Horizon and/or IBKC may experience negative reactions from the financial markets and from their respective customers and employees. For example, First Horizon’s or IBKC’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of First Horizon common stock or IBKC common stock could decline to the extent that current market prices reflect a market assumption that the merger will be beneficial and will be completed. First Horizon and/or IBKC also could be subject to litigation related to any failure to complete the merger or to proceedings commenced against First Horizon or IBKC to perform their respective obligations under the merger agreement. If the merger agreement is terminated under certain circumstances, either First Horizon or IBKC may be required to pay a termination fee of $156 million to the other party.

Additionally, each of First Horizon and IBKC has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of preparing, filing, printing and mailing this joint proxy statement/prospectus, and all filing and other fees paid in connection with the merger. If the merger is not completed, First Horizon and IBKC would have to pay these expenses without realizing the expected benefits of the merger.

First Horizon and IBKC will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on First Horizon or IBKC. These uncertainties may impair First Horizon’s or IBKC’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with First Horizon or IBKC to seek to change existing business relationships with First Horizon or IBKC. In addition, subject to certain exceptions, First Horizon and IBKC have agreed to operate their respective businesses in the ordinary course prior to the closing, and each party is restricted from making certain acquisitions and taking other specified actions without the consent of the other party until the merger is completed. These restrictions may prevent First Horizon and/or IBKC from pursuing attractive business opportunities that may arise prior to the completion of the merger. See “The Merger Agreement—Covenants and Agreements” beginning on page 150 for a description of the restrictive covenants applicable to First Horizon and IBKC.

The merger agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either First Horizon or IBKC.

The merger agreement contains provisions that restrict each of First Horizon’s and IBKC’s ability to, among other things, initiate, solicit, knowingly encourage or knowingly facilitate, inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by each respective board of directors, engage in any negotiations concerning, or provide any confidential or nonpublic information or data relating to, any alternative acquisition proposals. These provisions, which include a $156 million termination fee payable under certain circumstances, might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of First Horizon or IBKC from considering or proposing that acquisition even if, in the case of a potential acquisition of IBKC, it were prepared to pay

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consideration with a higher per share price to IBKC shareholders than what is contemplated in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price to acquire First Horizon or IBKC than it might otherwise have proposed to pay. For more information, see “The Merger Agreement—Agreement Not to Solicit Other Offers; Termination of the Merger Agreement; Effect of Termination; Termination Fee” and “The Merger Agreement—Shareholder Meetings and Recommendation of First Horizon’s and IBKC’s Boards of Directors” beginning on pages 156 and 155 respectively.

The shares of First Horizon common stock to be received by holders of IBKC common stock as a result of the merger will have different rights from the shares of IBKC common stock.

In the merger, holders of IBKC common stock will become holders of First Horizon common stock and their rights as shareholders will be governed by Tennessee law and the governing documents of the combined company. The rights associated with First Horizon common stock are different from the rights associated with IBKC common stock. See “Comparison of Shareholders’ Rights” beginning on page 204 for a discussion of the different rights associated with First Horizon common stock.

The rights of holders of First Horizon common stock and of holders of rollover First Horizon depositary shares to pursue claims against First Horizon or the depositary, as applicable, are limited by First Horizon’s bylaws and by the terms of the deposit agreements.

First Horizon’s bylaws, which will govern the combined company following completion of the merger, provide that, unless First Horizon consents in writing to an alternative forum, a state or federal court located within Shelby County in the State of Tennessee will be the sole and exclusive forum for (i) any derivative action or proceeding brought in the right of First Horizon, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of First Horizon to First Horizon or its shareholders, (iii) any action asserting a claim against First Horizon or any director, officer or other employee of First Horizon arising pursuant to any provision of the TBCA, of First Horizon’s charter or bylaws or (iv) any action asserting a claim against First Horizon or any director, officer or other employee of First Horizon that is governed by the internal affairs doctrine. In addition, the deposit agreements between IBKC and the depositary, which will be assumed by First Horizon at closing and will govern the rights of the rollover First Horizon depositary shares following completion of the merger, provide that any action or proceeding arising out of or relating in any way to the applicable deposit agreement may only be brought in a state court located in the State of New York or in the United States District Court for the Southern District of New York.

The foregoing exclusive forum clauses may have the effect of discouraging lawsuits against First Horizon or its directors, officers or other employees, or against the depositary, as applicable. Exclusive forum clauses may also lead to increased costs to bring a claim, or may limit the ability of holders of First Horizon common stock or holders of rollover First Horizon depositary shares to bring a claim in a judicial forum they find favorable.

To the fullest extent permitted by law, the exclusive forum clauses in First Horizon’s bylaws and in the deposit agreements will apply, respectively, to any actions or proceedings described in the first paragraph of this risk factor that arise or purport to arise under the federal securities laws, including the Securities Act and the Exchange Act. However, holders of First Horizon common stock and holders of rollover First Horizon depositary shares will not be deemed to have waived First Horizon’s compliance with the federal securities laws and the rules and regulations thereunder. To the extent these exclusive forum provisions restrict the courts in which holders of First Horizon common stock or holders of rollover First Horizon depositary shares may bring claims arising under the federal securities laws, there is uncertainty as to whether a court would enforce such provisions.

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First Horizon and IBKC will incur transaction and integration costs in connection with the merger.

First Horizon and IBKC have incurred and expect to incur significant, non-recurring costs in connection with negotiating the merger agreement and closing the merger. In addition, the combined company will incur integration costs following the completion of the merger as First Horizon and IBKC integrate their businesses, including facilities and systems consolidation costs and employment-related costs. Anticipated future merger and integration-related pre-tax costs are currently estimated to be $440 million. For more information, see “Unaudited Pro Forma Condensed Combined Financial Statements—Note 5—Estimated Cost Savings and Merger Integration Costs” beginning on page 174.

There can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs over time. First Horizon and IBKC may also incur additional costs to maintain employee morale and to retain key employees. First Horizon and IBKC will also incur significant legal, financial advisory, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the merger. Some of these costs are payable regardless of whether the merger is completed. See “The Merger Agreement—Expenses and Fees” beginning on page 160.

In connection with the merger, First Horizon will assume IBKC’s outstanding debt obligations and preferred stock, and the combined company’s level of indebtedness following the completion of the merger could adversely affect the combined company’s ability to raise additional capital and to meet its obligations under its existing indebtedness.

In connection with the merger, First Horizon will assume IBKC’s outstanding indebtedness and IBKC’s obligations related to its outstanding preferred stock. As of December 31, 2019, IBKC’s outstanding consolidated indebtedness consisted of $1,343,687,000 in long-term debt obligations, consisting of $1,188,584,000 in Federal Home Loan Bank advances, $34,993,000 in notes payable, and $120,110,000 in trust preferred securities. Of such long-term debt obligations, $582,371,000 matures in 2020, $175,225,000 matures in 2021 and the balance matures in 2022 and thereafter. First Horizon’s existing debt, together with any future incurrence of additional indebtedness, and the assumption of IBKC’s outstanding preferred stock, could have important consequences for the combined company’s creditors and the combined company’s shareholders. For example, it could:

 

 

limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

 

 

restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures;

 

 

restrict the combined company from paying dividends to its shareholders;

 

 

increase the combined company’s vulnerability to general economic and industry conditions; and

 

 

require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness and dividends on the preferred stock, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities.

Following completion of the merger, holders of First Horizon common stock will be subject to the prior dividend and liquidation rights of the holders of the First Horizon preferred stock and the rollover First Horizon preferred stock that First Horizon will issue upon completion of the merger. Holders of shares of IBKC preferred stock, which will be converted into rollover First Horizon preferred stock, as well as holders of shares of First Horizon preferred stock and any shares of preferred stock that First Horizon may issue in the future, would receive, upon the combined company’s voluntary or involuntary liquidation, dissolution or winding up, before any payment is made to holders of First Horizon common stock, their liquidation preferences as well as any accrued

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and unpaid distributions. These payments would reduce the remaining amount of the combined company’s assets, if any, available for distribution to holders of its common stock.

General market conditions and unpredictable factors, including conditions and factors different from those affecting IBKC preferred stock and IBKC depositary shares currently, could adversely affect market prices for rollover First Horizon preferred stock and rollover First Horizon depositary shares once the rollover First Horizon preferred stock is issued.

There can be no assurance about the market prices for the rollover First Horizon preferred stock that will be issued upon completion of the merger or the rollover First Horizon depositary shares. Several factors, many of which are beyond the control of First Horizon, could influence the market prices of the rollover First Horizon preferred stock and the rollover First Horizon depositary shares, including:

 

 

whether the combined company declares or fails to declare dividends on the rollover First Horizon preferred stock from time to time;

 

 

real or anticipated changes in the credit ratings assigned to the rollover First Horizon preferred stock and the rollover First Horizon depositary shares or other First Horizon securities;

 

 

the combined company’s creditworthiness;

 

 

interest rates;

 

 

developments in the securities, credit and housing markets, and developments with respect to financial institutions generally;

 

 

the market for similar securities; and

 

 

economic, corporate, securities market, geopolitical, public health (including the impact of the coronavirus (COVID-19) pandemic), regulatory or judicial events that affect the combined company, the banking industry or the financial markets generally.

Shares of rollover First Horizon preferred stock will be equity interests and will not constitute indebtedness. As such, rollover First Horizon preferred stock and rollover First Horizon depositary shares will rank junior to all indebtedness of, and other non-equity claims on, the combined company with respect to assets available to satisfy claims. The market prices for the rollover First Horizon preferred stock and rollover First Horizon depositary shares following the merger may be affected by factors different from those currently affecting the IBKC preferred stock and IBKC depositary shares.

The recent global coronavirus pandemic has led to periods of significant volatility in financial, commodities (including oil and gas) and other markets and could harm the business and results of operations for each of First Horizon and IBKC and the combined company following the completion of the merger.

In December 2019, a coronavirus (COVID-19) was reported in China, and has since spread to additional countries including the United States. In March 2020, the World Health Organization declared the coronavirus to be a pandemic. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus pandemic on the businesses of First Horizon, IBKC and the combined company, and there is no guarantee that efforts by First Horizon, IBKC and the combined company to address the adverse impacts of the coronavirus will be effective. The impact to date has included periods of significant volatility in financial, commodities and other markets. This volatility, if it continues, could have an adverse impact on First Horizon’s and IBKC’s customers and on the companies’ business, financial condition and results of operations. In particular, global markets for oil and gas have and may continue to be impacted by the coronavirus pandemic and/or other events beyond the control of First Horizon, IBKC or the combined company, and further volatility in commodity prices could have a negative impact on the economies of energy-dominant states in which IBKC and First Horizon conduct significant business.

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In addition, recent actions by US federal, state and foreign governments to address the pandemic, including travel bans and school, business and entertainment venue closures, may also have a significant adverse effect on the markets in which First Horizon and IBKC conduct their businesses. The extent of impacts resulting from the coronavirus pandemic and other events beyond the control of First Horizon, IBKC and the combined company will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus pandemic and actions taken to contain the coronavirus or its impact, among others.

In addition, the coronavirus pandemic could result in business disruption to First Horizon or IBKC, and if either company is unable to recover from such a business disruption on a timely basis, the merger and the combined company’s business and financial conditions and results of operations following the completion of the merger would be adversely affected. The merger and efforts to integrate the businesses of First Horizon and IBKC may also be delayed and adversely affected by the coronavirus pandemic, and become more costly. Each of First Horizon, IBKC and the combined company may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

Holders of First Horizon and IBKC common stock will have a reduced ownership and voting interest in the combined company after the merger and will exercise less influence over management.

Holders of First Horizon and IBKC common stock currently have the right to vote in the election of the board of directors and on other matters affecting First Horizon and IBKC, respectively. When the merger is completed, each IBKC shareholder will become a shareholder of First Horizon, and each holder of First Horizon common stock and each holder of IBKC common stock will become a holder of common stock of the combined company, with a percentage ownership of the combined company that is smaller than the shareholder’s percentage ownership of either First Horizon or IBKC individually, as applicable, prior to the consummation of the merger. Based on the number of shares of First Horizon and IBKC common stock outstanding as of the close of business on the respective record date, and based on the number of shares of First Horizon common stock expected to be issued in the merger, the former holders of IBKC common stock, as a group, are estimated to own approximately forty-four percent (44%) of the outstanding shares of the combined company immediately after the merger and current holders of First Horizon common stock as a group are estimated to own approximately fifty-six percent (56%) of the outstanding shares of the combined company immediately after the merger. Because of this, holders of IBKC common stock may have less influence on the management and policies of the combined company than they now have on the management and policies of IBKC, and holders of First Horizon common stock may have less influence on the management and policies of the combined company than they now have on the management and policies of First Horizon.

Holders of First Horizon common stock and holders of IBKC common stock will not have dissenters’ rights or appraisal rights in the merger.

Appraisal rights (also known as dissenters’ rights) are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction.

Under Section 48-23-102 of the TBCA, the holders of First Horizon common stock will not be entitled to dissenters’ rights in connection with the merger with respect to shares of any class or series that remain outstanding after completion of the merger. If the merger is completed, holders of First Horizon common stock will not receive any consideration, and their shares of First Horizon common stock will remain outstanding and will constitute shares of the combined company. Accordingly, holders of First Horizon common stock are not entitled to any dissenters’ rights in connection with the merger.

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Under Part 13 of the LBCA, the holders of IBKC common stock will not be entitled to appraisal rights in connection with the merger if, on the record date for the IBKC special meeting, IBKC’s shares are traded in an organized market that has at least two thousand (2,000) shareholders and a market value of at least $20 million. IBKC common stock is currently listed on the NASDAQ, a national securities exchange, and is expected to continue to be so listed on the record date for the IBKC special meeting. Accordingly, the holders of IBKC common stock are not entitled to any appraisal rights in connection with the merger.

Holders of record of IBKC preferred stock are entitled to exercise appraisal rights in connection with the merger, provided the proper procedures of Part 13 of the LBCA are followed. DTC, as nominee for the depository, is the holder of record of the shares of IBKC preferred stock as of the date of this joint proxy statement/prospectus.

The IBKC depositary shares are not a class or series of shares issued by IBKC and thus appraisal rights under Part 13 of the LBCA do not independently apply to the depositary shares. Accordingly, to exercise or to direct the depository to exercise appraisal rights with respect to the IBKC preferred stock, holders of depositary shares will be required to follow the procedures provided by the depository with respect thereto and in accordance with requirements of Louisiana law.

Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact the business and operations of First Horizon and IBKC.

Shareholders of First Horizon and/or IBKC may file lawsuits against First Horizon, IBKC and/or the directors and officers of either company in connection with the merger. One of the conditions to the closing is that no order, injunction or decree issued by any court or governmental entity of competent jurisdiction or other legal restraint preventing the consummation of the merger or any of the other transactions contemplated by the merger agreement be in effect. If any plaintiff were successful in obtaining an injunction prohibiting First Horizon or IBKC defendants from completing the merger pursuant to the merger agreement, then such injunction may delay or prevent the effectiveness of the merger and could result in significant costs to First Horizon and/or IBKC, including any cost associated with the indemnification of directors and officers of each company. If a lawsuit is filed, First Horizon and IBKC may incur costs in connection with the defense or settlement of any shareholder lawsuits filed in connection with the merger. Such litigation could have an adverse effect on the financial condition and results of operations of First Horizon and IBKC and could prevent or delay the completion of the merger.

Litigation relating to the merger could delay and/or enjoin the merger.

Following the public announcement of the merger agreement, purported stockholders of IBKC filed a putative class action lawsuit and three individual lawsuits against IBKC, the members of the IBKC board of directors, and in the case of the putative class action, against First Horizon. Two of the individual lawsuits were filed in the United States District Court for the Eastern District of New York (Hertz v. IBERIABANK et al., No. 1:20-cv-00267 (filed Jan. 16, 2020); Cooksey v. IBERIABANK et al., No. 1:20-cv-00431 (filed Jan. 26, 2020)) and the third was filed in the United States District Court for the Southern District of New York, (Wang v. IBERIABANK, et al., No. 1:20-cv-00105 (filed on Jan. 6, 2020)). The putative class action was filed in the United States District Court for the District of Delaware (Parshall v. IBERIABANK et al., No. 1:20-cv-00027 (Jan. 8, 2020)). The complaints contain similar allegations contending, among other things, that the registration statement on Form S-4 misstated or failed to disclose certain allegedly material information in violation of federal securities laws. The complaints seek injunctive relief enjoining the merger, attorneys and experts’ fees, and other remedies.

On March 9, 2020, a purported stockholder of First Horizon filed an individual lawsuit against First Horizon and members of the First Horizon board of directors in the United States District Court for the Western District of Tennessee (Bushansky v. First Horizon National Corp. et al., No. 2:20-cv-02170-JTF-cgc (filed Mar. 9, 2020)), alleging that the amended registration statement on Form S-4 omits or misrepresents allegedly material information in violation of federal securities laws. This

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complaint similarly seeks injunctive relief enjoining the merger, attorneys and experts’ fees, and other remedies.

Additional lawsuits against First Horizon, IBKC, and/or the directors and officers of either company in connection with the merger may be filed. The outcome of the pending and any additional future litigation is uncertain. If any case is not resolved, the lawsuit(s) could prevent or delay completion of the merger and result in substantial costs to First Horizon and IBKC, including any costs associated with the indemnification of directors and officers. One of the conditions to the closing of the merger is that no order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger or the bank merger shall be in effect. As such, if plaintiffs are successful in obtaining an injunction prohibiting the completion of the merger or the bank merger on the agreed-upon terms, then such injunction may prevent the merger from being completed, or from being completed within the expected timeframe. The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is completed may adversely affect the combined company’s business, financial condition, results of operations and cash flows. See “The Merger—Litigation Relating to the Merger” on page 142.

Risks Relating to First Horizon’s Business

You should read and consider risk factors specific to First Horizon’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in First Horizon’s Annual Report on Form 10-K for the year ended December 31, 2019 and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 222 of this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

Risks Relating to IBKC’s Business

You should read and consider risk factors specific to IBKC’s business that will also affect the combined company after the merger. These risks are described in the sections entitled “Risk Factors” in IBKC’s Annual Report on Form 10-K for the year ended December 31, 2019 and in other documents incorporated by reference into this joint proxy statement/prospectus. Please see the section entitled “Where You Can Find More Information” beginning on page 222 of this joint proxy statement/prospectus for the location of information incorporated by reference into this joint proxy statement/prospectus.

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THE FIRST HORIZON SPECIAL MEETING

This section contains information for holders of First Horizon common stock and First Horizon preferred stock about the special meeting that First Horizon has called to allow holders of First Horizon common stock to consider and vote on the First Horizon merger proposal and other related matters. This joint proxy statement/prospectus is accompanied by a notice of the First Horizon special meeting, and a form of proxy card that the First Horizon board of directors is soliciting for use by holders of First Horizon common stock at the special meeting and at any adjournments or postponements of the special meeting.

Date, Time and Place of the Meeting

The First Horizon special meeting will be held on April 24 at First Horizon Building M-Level Auditorium 165 Madison Avenue Memphis, TN 38103, at 10:00 AM local time.

Matters to Be Considered

At the First Horizon special meeting, holders of First Horizon common stock will be asked to consider and vote upon the following proposals:

 

 

the First Horizon merger proposal;

 

 

the First Horizon charter amendment proposal;

 

 

the First Horizon compensation proposal; and

 

 

the First Horizon adjournment proposal.

Recommendation of First Horizon’s Board of Directors

The First Horizon board of directors recommends that you vote “FOR” the First Horizon merger proposal, “FOR” the First Horizon charter amendment proposal, “FOR” the First Horizon compensation proposal and “FOR” the First Horizon adjournment proposal. See “The Merger—First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors” beginning on page 76 for a more detailed discussion of the First Horizon board of directors’ recommendation.

Record Date and Quorum

The First Horizon board of directors has fixed the close of business on February 24, 2020 as the record date for determination of holders of First Horizon common stock entitled to notice of and to vote at the First Horizon special meeting. As of the record date, there were 311,782,256 shares of First Horizon common stock outstanding.

Holders of a majority of the shares of First Horizon common stock outstanding on the record date must be present, either in person or by proxy, to constitute a quorum at the First Horizon special meeting. If you fail to submit a proxy or to vote in person at the First Horizon special meeting, your shares of First Horizon common stock will not be counted towards a quorum. Abstentions are considered present for purposes of establishing a quorum.

At the First Horizon special meeting, each share of First Horizon common stock is entitled to one (1) vote on all matters properly submitted to holders of First Horizon common stock.

As of February 24, 2020, First Horizon directors and executive officers and their affiliates owned and were entitled to vote approximately 4,847,111 shares of First Horizon common stock, representing less than two percent (2%) of the outstanding shares of First Horizon common stock. We currently expect that First Horizon’s directors and executive officers will vote their shares in favor of the merger and the First Horizon charter amendment proposal, although none of them has entered into any agreements obligating them to do so.

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Vote Required; Treatment of Abstentions and Failure to Vote

First Horizon merger proposal:

 

 

Vote required: Approval of the First Horizon merger proposal requires the affirmative vote of a majority of the votes entitled to be cast on First Horizon merger proposal by the holders of First Horizon common stock. Approval of the First Horizon merger proposal is a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the First Horizon special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the First Horizon merger proposal, it will have the same effect as a vote “AGAINST” the First Horizon merger proposal.

First Horizon charter amendment proposal:

 

 

Vote required: Approval of the First Horizon charter amendment proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the First Horizon special meeting. Approval of the First Horizon charter amendment proposal is a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the First Horizon special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the First Horizon charter amendment proposal, you will not be deemed to have cast a vote with respect to the First Horizon charter amendment proposal and it will have no effect on the First Horizon charter amendment proposal.

First Horizon compensation proposal:

 

 

Vote required: Approval of the First Horizon compensation proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the First Horizon special meeting. Approval of the First Horizon compensation proposal is not a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the First Horizon special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the First Horizon compensation proposal, you will not be deemed to have cast a vote with respect to the First Horizon compensation proposal and it will have no effect on the First Horizon compensation proposal.

First Horizon adjournment proposal:

 

 

Vote required: Approval of the First Horizon adjournment proposal requires the affirmative vote of the holders of at least a majority of the votes cast at the First Horizon special meeting. Approval of the First Horizon adjournment proposal is not a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the First Horizon special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the First Horizon adjournment proposal, you will not be deemed to have cast a vote with respect to the First Horizon adjournment proposal and it will have no effect on the First Horizon adjournment proposal.

Holders of First Horizon preferred stock are also entitled to notice of the special meeting, but holders of First Horizon preferred stock and holders of depositary shares representing interest in

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shares of First Horizon preferred stock are not entitled to and are not requested to vote at the First Horizon special meeting.

Attending the Special Meeting

All holders of First Horizon common stock, including holders of record and shareholders who hold their shares of First Horizon common stock through banks, brokers or other nominees are invited to attend the First Horizon special meeting. Shareholders of record can vote in person at the First Horizon special meeting. If you are not a shareholder of record, you must obtain a proxy executed in your favor from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote in person at the First Horizon special meeting. If you plan to attend the First Horizon special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. First Horizon reserves the right to refuse admittance to anyone without proper proof of share ownership and without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the First Horizon special meeting is prohibited without First Horizon’s express written consent.

Proxies

A holder of First Horizon common stock may vote by proxy or in person at the First Horizon special meeting. If you hold your shares of First Horizon common stock in your name as a holder of record, to submit a proxy, you, as a holder of First Horizon common stock, may use one of the following methods:

 

 

By telephone: by calling the toll-free number indicated on the accompanying proxy card and following the recorded instructions.

 

 

Through the Internet: by visiting the website indicated on the accompanying proxy card and following the instructions.

 

 

By completing and returning the accompanying proxy card in the enclosed postage-paid envelope. The envelope requires no additional postage if mailed in the United States.

First Horizon requests that holders of First Horizon common stock vote by telephone, over the Internet or by completing and signing the accompanying proxy card and returning it to First Horizon as soon as possible in the enclosed postage-paid envelope. When the accompanying proxy card is returned properly executed, the shares of First Horizon common stock represented by it will be voted at the First Horizon special meeting in accordance with the instructions contained on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” the First Horizon merger proposal, “FOR” the First Horizon charter amendment proposal, “FOR” the First Horizon compensation proposal and “FOR” the First Horizon adjournment proposal.

If a holder’s shares are held in “street name” by a broker, bank or other nominee, the holder should check the voting form used by that firm to determine whether the holder may vote by telephone or the Internet.

Every vote is important. Accordingly, you should sign, date and return the enclosed proxy card, or vote via the Internet or by telephone, whether or not you plan to attend the First Horizon special meeting in person. Sending in your proxy card or voting by telephone or on the Internet will not prevent you from voting your shares personally at the meeting because you may revoke your proxy at any time before it is voted.

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Shares Held in Street Name

If your shares are held in “street name” through a broker, bank or other nominee, you must instruct the broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will vote your shares only if you provide specific instructions on how to vote by following the instructions provided to you by your broker, bank or other nominee.

You may not vote shares held in street name by returning a proxy card directly to First Horizon or by voting in person at the First Horizon special meeting unless you provide a “legal proxy” giving you the right to vote the shares, which you must obtain from your broker, bank or other nominee. If you choose to vote your shares in person at the First Horizon special meeting, please bring proof of identification.

Further, brokers, banks or other nominees who hold shares of First Horizon common stock on behalf of their customers may not give a proxy to First Horizon to vote those shares with respect to any of the proposals without specific instructions from their customers, as brokers, banks, and other nominees do not have discretionary voting power on the proposals that will be voted upon at the First Horizon special meeting.

Revocability of Proxies

If you are a holder of First Horizon common stock of record, you may revoke your proxy at any time before it is voted by:

 

 

submitting a written notice of revocation to First Horizon’s corporate secretary;

 

 

granting a subsequently dated proxy;

 

 

voting by telephone or the Internet at a later time; or

 

 

attending in person and voting at the First Horizon special meeting.

If you hold your shares of First Horizon common stock through a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote.

Attendance at the First Horizon special meeting will not in and of itself constitute revocation of a proxy. A revocation or later-dated proxy received by First Horizon after the vote will not affect the vote. First Horizon’s corporate secretary’s mailing address is: Corporate Secretary, First Horizon National Corporation, 165 Madison Avenue, Memphis, Tennessee 38103. If the First Horizon special meeting is postponed or adjourned, it will not affect the ability of holders of First Horizon common stock of record as of the record date to exercise their voting rights or to revoke any previously-granted proxy using the methods described above.

Delivery of Proxy Materials

As permitted by applicable law, only one (1) copy of this joint proxy statement/prospectus is being delivered to holders of First Horizon common stock residing at the same address, unless such holders of First Horizon common stock have notified First Horizon of their desire to receive multiple copies of the joint proxy statement/prospectus.

First Horizon will promptly deliver, upon oral or written request, a separate copy of the joint proxy statement/prospectus to any holder of First Horizon common stock residing at an address to which only one (1) copy of such document was mailed. Requests for additional copies should be directed First Horizon’s proxy solicitor, Morrow Sodali LLC, by calling toll-free at (800) 662-5200.

Solicitation of Proxies

First Horizon and IBKC will share equally the expenses incurred in connection with the printing and mailing of this joint proxy statement/prospectus. To assist in the solicitation of proxies, First Horizon has retained Morrow Sodali LLC, and will pay Morrow Sodali LLC a fee of $17,500 plus reasonable

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expenses for these services. First Horizon and its proxy solicitor may also request banks, brokers and other intermediaries holding shares of First Horizon common stock beneficially owned by others to send this document to, and obtain proxies from, the beneficial owners and may reimburse such record holders for their reasonable out-of-pocket expenses in so doing. Solicitation of proxies by mail may be supplemented by telephone and other electronic means, advertisements and personal solicitation by the directors, officers or employees of First Horizon. No additional compensation will be paid to our directors, officers or employees for solicitation.

Other Matters to Come Before the First Horizon Special Meeting

First Horizon management knows of no other business to be presented at the First Horizon special meeting, but if any other matters are properly presented to the meeting or any adjournments thereof, the persons named in the proxies will vote upon them in accordance with the board of directors’ recommendations.

Assistance

If you need assistance in completing your proxy card, have questions regarding First Horizon’s special meeting or would like additional copies of this joint proxy statement/prospectus, please contact Clyde A. Billings, Jr., First Horizon National Corporation, 165 Madison Avenue, 13th Floor, Memphis, Tennessee, telephone (901) 523-5679, or First Horizon’s proxy solicitor, Morrow Sodali LLC, at the following address or phone number: 470 West Avenue, Stamford, Connecticut 06902, or calling toll-free: (800) 662-5200.

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FIRST HORIZON PROPOSALS

PROPOSAL 1: FIRST HORIZON MERGER PROPOSAL

First Horizon is asking holders of First Horizon common stock to approve the merger agreement and the transactions contemplated thereby. Holders of First Horizon common stock should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

After careful consideration, the First Horizon board of directors unanimously determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of First Horizon and its shareholders and unanimously approved and adopted the merger agreement, the merger and the other transactions contemplated by the merger agreement. See “The Merger—First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors” beginning on page 76 in this joint proxy statement/prospectus for a more detailed discussion of the First Horizon board of directors’ recommendation.

The approval of the merger by holders of First Horizon common stock is a condition to the completion of the merger.

The First Horizon board of directors unanimously recommends a vote “FOR” the First Horizon merger proposal.

PROPOSAL 2: FIRST HORIZON CHARTER AMENDMENT PROPOSAL

In connection with the merger, First Horizon is asking the holders of First Horizon common stock to approve an amendment to the First Horizon charter to effect an increase in the number of authorized shares of First Horizon common stock from 400,000,000 to 700,000,000, to be effective only upon the completion of the merger. A copy of the proposed articles of amendment to First Horizon’s charter is attached to this joint proxy statement/prospectus as Annex F. Holders of First Horizon common stock should read the First Horizon charter amendment in its entirety.

The approval of the First Horizon charter amendment proposal by holders of First Horizon common stock is a condition to the completion of the merger.

The First Horizon board of directors unanimously recommends a vote “FOR” the First Horizon charter amendment proposal.

PROPOSAL 3: FIRST HORIZON COMPENSATION PROPOSAL

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, First Horizon is seeking a non-binding, advisory stockholder approval of the compensation of First Horizon’s named executive officers that is based on or otherwise relates to the merger as disclosed in the section entitled “The Merger—Interests of Certain First Horizon Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to First Horizon’s Named Executive Officers—Golden Parachute Compensation” beginning on page 121. The proposal gives holders of First Horizon common stock the opportunity to express their views on the merger-related compensation of First Horizon’s named executive officers.

Accordingly, First Horizon is asking holders of First Horizon common stock to vote “FOR” the adoption of the following resolution, on a non-binding advisory basis:

“RESOLVED, that the compensation that will or may be paid or become payable to the First Horizon named executive officers, in connection with the merger, and the agreements or understandings pursuant to which such compensation will or may be paid or become payable, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in “Interests of Certain First Horizon Directors and Executive Officers in the Merger—Quantification of Payments and Benefits

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to First Horizon’s Named Executive Officers—Golden Parachute Compensation” are hereby APPROVED.”

The advisory vote on the First Horizon compensation proposal is a vote separate and apart from the votes on the First Horizon merger proposal, the First Horizon charter amendment proposal and the First Horizon adjournment proposal. Accordingly, if you are a holder of First Horizon common stock, you may vote to approve the First Horizon merger proposal, the First Horizon charter amendment proposal and/or the First Horizon adjournment proposal and vote not to approve the First Horizon compensation proposal, and vice versa. The approval of the First Horizon compensation proposal by holders of First Horizon common stock is not a condition to the completion of the merger. If the merger is completed, the merger-related compensation will be paid to First Horizon’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if holders of First Horizon common stock fail to approve the advisory vote regarding merger-related compensation.

The First Horizon board of directors unanimously recommends a vote “FOR” the advisory First Horizon compensation proposal.

PROPOSAL 4: FIRST HORIZON ADJOURNMENT PROPOSAL

The First Horizon special meeting may be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the First Horizon special meeting to approve the First Horizon merger proposal and/or the First Horizon charter amendment or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of First Horizon common stock.

If, at the First Horizon special meeting, the number of shares of First Horizon common stock present or represented and voting in favor of the First Horizon merger proposal and/or the First Horizon charter amendment proposal is insufficient to approve the First Horizon merger proposal and/or the First Horizon charter amendment proposal, as the case may be, First Horizon intends to move to adjourn the First Horizon special meeting in order to enable the First Horizon board of directors to solicit additional proxies for approval of the First Horizon merger proposal and/or the First Horizon charter amendment proposal. In that event, First Horizon will ask holders of First Horizon common stock to vote upon the First Horizon adjournment proposal, but not the First Horizon merger proposal or the First Horizon charter amendment proposal.

In this proposal, First Horizon is asking holders of First Horizon common stock to authorize the holder of any proxy solicited by the First Horizon board of directors, on a discretionary basis, if a quorum is not present and (i) if there are not sufficient votes at the time of the First Horizon special meeting to approve the First Horizon merger proposal and/or the First Horizon charter amendment proposal or (ii) if necessary or appropriate to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of First Horizon common stock, to vote in favor of adjourning the First Horizon special meeting to another time and place for the purpose of soliciting additional proxies, including the solicitation of proxies from holders of First Horizon common stock who have previously voted. Pursuant to First Horizon’s bylaws, whether or not a quorum is obtained at the First Horizon special meeting, the chairman of the First Horizon special meeting may adjourn the meeting without notice, except as provided by law and other than by announcement at the First Horizon special meeting, and may do so without a vote of holders of First Horizon common stock.

The approval of the First Horizon adjournment proposal by holders of First Horizon common stock is not a condition to the completion of the merger.

The First Horizon board of directors unanimously recommends a vote “FOR” the First Horizon adjournment proposal.

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THE IBKC SPECIAL MEETING

This section contains information for holders of IBKC common stock and IBKC preferred stock about the special meeting that IBKC has called to allow holders of IBKC common stock to consider and vote on the IBKC merger proposal and other related matters. This joint proxy statement/prospectus is accompanied by a notice of the special meeting of holders of IBKC common stock and holders of IBKC preferred stock and a form of proxy card that the IBKC board of directors is soliciting for use at the special meeting and at any adjournments or postponements of the special meeting.

Date, Time and Place of the Meeting

The IBKC special meeting will be held on April 24 at IBERIABANK, 601 Poydras Street, 20th Floor, New Orleans, Louisiana 70130, at 10:00 AM local time.

Matters to Be Considered

At the IBKC special meeting, holders of IBKC common stock will be asked to consider and vote upon the following proposals:

 

 

the IBKC merger proposal;

 

 

the IBKC compensation proposal; and

 

 

the IBKC adjournment proposal.

Recommendation of IBKC’s Board of Directors

The IBKC board of directors recommends that you vote “FOR” the IBKC merger proposal, “FOR” the IBKC compensation proposal and “FOR” the IBKC adjournment proposal. See “The Merger—IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors” beginning on page 79 for a more detailed discussion of the IBKC board of directors’ recommendation.

Record Date and Quorum

The IBKC board of directors has fixed the close of business on February 24, 2020 as the record date for determination of holders of IBKC common stock entitled to notice of and to vote at the IBKC special meeting. As of the record date, there were 52,583,117 shares of IBKC common stock outstanding.

The presence at the IBKC special meeting, in person or by proxy, of the holders of a majority of the outstanding shares of IBKC common stock entitled to vote at the IBKC special meeting will constitute a quorum for purposes of taking actions on the IBKC merger proposal, the IBKC compensation proposal and the IBKC adjournment proposal. Abstentions will be included in determining the number of shares present at the IBKC special meeting for the purpose of determining the presence of a quorum.

At the IBKC special meeting, each share of IBKC common stock is entitled to one (1) vote on all matters properly submitted to holders of IBKC common stock.

As of February 24, 2020, IBKC directors and executive officers and their affiliates owned and were entitled to vote approximately 1,121,800 shares of IBKC common stock, representing less than three percent (3%) of the outstanding shares of IBKC common stock. We currently expect that IBKC’s directors and executive officers will vote their shares in favor of the merger, although none of them has entered into any agreements obligating them to do so.

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Vote Required; Treatment of Abstentions and Failure to Vote

IBKC merger proposal:

 

 

Vote required: Approval of the IBKC merger proposal requires the affirmative vote of a majority of all votes entitled to be cast on the IBKC merger proposal by holders of IBKC common stock. Approval of the IBKC merger proposal is a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the IBKC special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the IBKC merger proposal, it will have the same effect as a vote “AGAINST” the IBKC merger proposal.

IBKC compensation proposal:

 

 

Vote required: Approval of the IBKC compensation proposal requires the affirmative vote of the holders of at least a majority of the votes cast by holders of IBKC common stock at the IBKC special meeting. Approval of the IBKC compensation proposal is not a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the IBKC special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the IBKC compensation proposal, you will not be deemed to have cast a vote with respect to the IBKC compensation proposal and it will have no effect on the IBKC compensation proposal.

IBKC adjournment proposal:

 

 

Vote required: Approval of the IBKC adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of IBKC common stock. Approval of the IBKC compensation proposal is not a condition to the completion of the merger.

 

 

Effect of abstentions and broker non-votes: If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the IBKC special meeting or fail to instruct your bank, broker or other nominee how to vote with respect to the IBKC adjournment proposal, you will not be deemed to have cast a vote with respect to the IBKC adjournment proposal and it will have no effect on the IBKC adjournment proposal.

Holders of IBKC preferred stock are also entitled to notice of the IBKC special meeting, but holders of IBKC preferred stock and holders of IBKC depositary shares are not entitled to and are not requested to vote at the IBKC special meeting.

Attending the Special Meeting

The proxy card is your admission ticket. When you arrive at the IBKC special meeting, you will be asked to present photo identification, such as a driver’s license. If you are a beneficial owner of IBKC common stock held by a broker, bank or other nominee, you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or a letter from a bank or broker are examples of proof of ownership. If you want to vote your IBKC shares held in nominee name in person, you must get a “legal proxy” in your name from the broker, bank or other nominee that holds your shares.

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Proxies

A holder of IBKC shares may vote by proxy or in person at the IBKC special meeting. If you hold your shares in your name as a holder of record, to submit a proxy, you, as a holder of IBKC shares, may use one of the following methods:

 

 

By telephone: by calling the toll-free number indicated on the accompanying proxy card and following the recorded instructions.

 

 

Through the Internet: by visiting the website indicated on the accompanying proxy card and following the instructions.

 

 

By completing and returning the accompanying proxy card in the enclosed postage-paid envelope. The envelope requires no additional postage if mailed in the United States.

IBKC requests that holders of IBKC shares vote by telephone, over the Internet or by completing and signing the accompanying proxy card and returning it to IBKC as soon as possible in the enclosed postage-paid envelope. When the accompanying proxy card is returned properly executed, the shares represented by it will be voted at the IBKC special meeting in accordance with the instructions contained on the proxy card.

If a holder’s shares are held in “street name” by a broker, bank or other nominee, the holder should check the voting form used by that firm to determine whether the holder may vote by telephone or the Internet. Every vote is important. Accordingly, you should sign, date and return the enclosed proxy card, or vote via the Internet or by telephone, whether or not you plan to attend the IBKC special meeting in person. Sending in your proxy card or voting by telephone or on the Internet will not prevent you from voting your shares personally at the meeting because you may revoke your proxy at any time before it is voted.

Shares Held in Street Name

If your shares are held in “street name” through a broker, bank or other nominee, you must instruct the broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will vote your shares only if you provide specific instructions on how to vote by following the instructions provided to you by your broker, bank or other nominee.

You may not vote shares held in street name by returning a proxy card directly to IBKC or by voting in person at the IBKC special meeting unless you provide a “legal proxy” giving you the right to vote the shares, which you must obtain from your broker, bank or other nominee. If you choose to vote your shares in person at the IBKC special meeting, please bring proof of identification.

Further, brokers, banks or other nominees who hold shares on behalf of their customers may not give a proxy to IBKC to vote those shares with respect to any of the proposals without specific instructions from their customers, as brokers, banks, and other nominees do not have discretionary voting power on the proposals that will be voted upon at the IBKC special meeting.

Revocability of Proxies

If you are a holder of IBKC shares of record, you may revoke your proxy at any time before it is voted by:

 

 

submitting a written notice of revocation to IBKC’s corporate secretary;

 

 

granting a subsequently dated proxy;

 

 

voting by telephone or the Internet at a later time; or

 

 

attending in person and voting at the IBKC special meeting.

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If you hold your shares of IBKC common stock through a broker, bank or other nominee, you should contact your broker, bank or other nominee to change your vote.

Attendance at the IBKC special meeting will not in and of itself constitute revocation of a proxy. A revocation or later-dated proxy received by IBKC after the vote will not affect the vote. IBKC’s corporate secretary’s mailing address is: IBERIABANK Corporation, 200 West Congress Street, Lafayette, Louisiana 70501, Attention: Robert B. Worley, Jr., Corporate Secretary. If the IBKC special meeting is postponed or adjourned, it will not affect the ability of holders of IBKC common stock as of the record date to exercise their voting rights or to revoke any previously-granted proxy using the methods described above.

Delivery of Proxy Materials

As permitted by applicable law, only one (1) copy of this joint proxy statement/prospectus is being delivered to holders of IBKC common stock and holders of IBKC preferred stock residing at the same address, unless such holders of IBKC common stock or IBKC preferred stock have notified IBKC of their desire to receive multiple copies of the joint proxy statement/prospectus.

IBKC will promptly deliver, upon oral or written request, a separate copy of the joint proxy statement/prospectus to any holder of IBKC common stock residing at an address to which only one (1) copy of such document was mailed. Requests for additional copies should be directed to Investor Relations at (337) 521-4012 or IBKC’s proxy solicitor, Georgeson LLC by calling toll-free at (888) 206 0860.

Solicitation of Proxies

First Horizon and IBKC will share equally the expenses incurred in connection with the printing and mailing of this joint proxy statement/prospectus. To assist in the solicitation of proxies, IBKC has retained Georgeson LLC, and estimates it will pay Georgeson LLC a fee of approximately $13,500 plus reimbursement of certain costs and expenses incurred in connection with the solicitation. IBKC and its proxy solicitor will also request banks, brokers and other intermediaries holding shares of IBKC common stock to send this document to, and obtain proxies from, the beneficial owners and may reimburse such record holders for their reasonable out-of-pocket expenses in so doing. Solicitation of proxies by mail may be supplemented by telephone and other electronic means, advertisements and personal solicitation by the directors, officers or employees of IBKC. No additional compensation will be paid to our directors, officers or employees for solicitation.

You should not send in any IBKC stock certificates with your proxy card (or, if you hold your shares in “street name” your voting instruction card). The exchange agent will mail a transmittal letter with instructions for the surrender of stock certificates to holders of IBKC common stock as soon as practicable after completion of the merger.

Other Matters to Come Before the IBKC Special Meeting

IBKC management knows of no other business to be presented at the IBKC special meeting, but if any other matters are properly presented to the meeting or any adjournments thereof, the persons named in the proxies will vote upon them in accordance with the board of directors’ recommendations.

Assistance

If you need assistance in completing your proxy card, have questions regarding IBKC’s special meeting or would like additional copies of this joint proxy statement/prospectus, please contact Investor Relations at (337) 521-4012 or IBKC’s proxy solicitor, Georgeson LLC, by calling toll-free at (888) 206 0860.

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IBKC PROPOSALS

PROPOSAL 1: IBKC MERGER PROPOSAL

IBKC is asking holders of IBKC common stock to approve the merger agreement and the transactions contemplated thereby. Holders of IBKC common stock should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

After careful consideration, the IBKC board of directors, by a unanimous vote of all directors, approved and adopted the merger agreement and declared the merger agreement and the transactions contemplated thereby, including the merger, to be advisable and in the best interest of IBKC and the shareholders of IBKC. See “The Merger—IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors” beginning on page 79 for a more detailed discussion of the IBKC board of directors’ recommendation.

The approval of the IBKC merger proposal by holders of the IBKC common stock is a condition to the completion of the merger.

The IBKC board of directors recommends a vote “FOR” the IBKC merger proposal.

PROPOSAL 2: IBKC COMPENSATION PROPOSAL

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, IBKC is seeking a non-binding, advisory stockholder approval of the compensation of IBKC’s named executive officers that is based on or otherwise relates to the merger as disclosed in the section entitled “The Merger—Interests of Certain IBKC Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to IBKC’s Named Executive Officers—Golden Parachute Compensation” beginning on page 130. The proposal gives holders of IBKC common stock the opportunity to express their views on the merger-related compensation of IBKC’s named executive officers.

Accordingly, IBKC is asking holders of IBKC common stock to vote “FOR” the adoption of the following resolution, on a non-binding advisory basis:

“RESOLVED, that the compensation that will or may be paid or become payable to the IBKC named executive officers, in connection with the merger, and the agreements or understandings pursuant to which such compensation will or may be paid or become payable, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in “Interests of Certain IBKC Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to IBKC’s Named Executive Officers—Golden Parachute Compensation,” are hereby APPROVED.”

The advisory vote on the IBKC compensation proposal is a vote separate and apart from the votes on the IBKC merger proposal and the IBKC adjournment proposal. Accordingly, if you are a holder of IBKC common stock, you may vote to approve the IBKC merger proposal and/or the IBKC adjournment proposal and vote not to approve the IBKC compensation proposal, and vice versa. The approval of the IBKC compensation proposal by holders of IBKC common stock is not a condition to the completion of the merger. If the merger is completed, the merger-related compensation will be paid to IBKC’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if holders of IBKC common stock fail to approve the advisory vote regarding merger-related compensation.

The IBKC board of directors unanimously recommends a vote “FOR” the advisory IBKC compensation proposal.

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PROPOSAL 3: IBKC ADJOURNMENT PROPOSAL

The IBKC special meeting may be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the IBKC special meeting to approve the IBKC merger proposal.

If, at the IBKC special meeting, the number of shares of IBKC common stock present or represented and voting in favor of the IBKC merger proposal is insufficient to approve the IBKC merger proposal, IBKC intends to move to adjourn the IBKC special meeting in order to enable the IBKC board of directors to solicit additional proxies for approval of the IBKC merger proposal. In that event, IBKC will ask holders of IBKC common stock to vote upon the IBKC adjournment proposal, but not the IBKC merger proposal or the IBKC compensation proposal.

In this proposal, IBKC is asking holders of IBKC common stock to authorize the holder of any proxy solicited by the IBKC board of directors on a discretionary basis (i) if there are not sufficient votes at the time of the IBKC special meeting to approve the IBKC merger proposal or (ii) if necessary or appropriate to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to holders of IBKC common stock, to vote in favor of adjourning the IBKC special meeting to another time and place for the purpose of soliciting additional proxies, including the solicitation of proxies from holders of IBKC common stock who have previously voted. Pursuant to IBKC’s bylaws, the IBKC special meeting may be adjourned without new notice being given unless a new record date is set for the adjourned meeting

The approval of the IBKC adjournment proposal by the holders of IBKC common stock is not a condition to the completion of the merger.

The IBKC board of directors recommends a vote “FOR” the IBKC adjournment proposal.

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INFORMATION ABOUT FIRST HORIZON

First Horizon is a Tennessee corporation. First Horizon was incorporated in 1968 and is headquartered in Memphis, Tennessee. First Horizon is a bank holding company under the BHC Act and a financial holding company under the Gramm-Leach-Bliley Act. As of September 30, 2019, First Horizon had total consolidated assets of $43.7 billion, deposits of $31.9 billion, and shareholders’ equity of $4.7 billion.

First Horizon provides diversified financial services primarily through its principal subsidiary, First Horizon Bank. First Horizon Bank is a Tennessee-chartered bank and a member of the Federal Reserve System. Originally chartered as a national bank in 1864, the bank has over 250 bank branches in seven (7) southeastern states, has a fixed income business in eighteen (18) states spanning the U.S., and has a number of operating subsidiaries and divisions. First Horizon and its subsidiaries offer a wide range of financial services, including retail banking, commercial and business banking, wealth management, mortgage lending, asset based lending, fixed income, insurance and brokerage services.

First Horizon’s common stock is traded on the NYSE under the symbol “FHN.” Additional information about First Horizon and its subsidiaries is included in documents incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 222.

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INFORMATION ABOUT IBKC

IBKC, a Louisiana corporation, is a financial holding company with 319 combined locations, including 191 bank branch offices and three (3) loan production offices in Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, South Carolina, North Carolina, Mississippi, Missouri, and New York, twenty-eight (28) title insurance offices in Arkansas, Tennessee and Louisiana and mortgage representatives in eighty-two (82) locations in twelve (12) states. The Company also has fourteen (14) wealth management locations in five (5) states and one (1) IBERIA Capital Partners LLC (“ICP”) office in Louisiana. As of September 30, 2019, IBKC had total consolidated assets of $31.7 billion, total deposits of $25.0 billion and shareholders’ equity of $4.3 billion.

IBKC’s principal executive office is located at 200 West Congress Street, Lafayette, Louisiana, and the telephone number at that office is (337) 521-4003. IBKC’s website is located at www.iberiabank.com. The information contained on IBKC’s website is not part of this joint proxy statement/prospectus.

IBKC is the holding company for IBERIABANK, a Louisiana chartered banking corporation headquartered in Lafayette, Louisiana; Lenders Title Company (“Lenders Title”), an Arkansas-chartered title insurance and closing services agency headquartered in Little Rock, Arkansas; ICP, a corporate finance services firm; 1887 Leasing, LLC (“1887 Leasing”), a holding company for IBKC’s aircraft; IBERIA Asset Management, Inc. (“IAM”), which provides wealth management and trust advisory services to high net worth individuals, pension funds, corporations and trusts; and IBERIA CDE, LLC (“CDE”), which invests in purchased tax credits.

IBERIABANK offers commercial and retail banking products and services to customers throughout locations in ten (10) states. IBERIABANK provides these products and services in Louisiana, Alabama, Florida, Arkansas, Tennessee, Georgia, Texas, North Carolina, South Carolina and New York, as well as on-line at www.iberiabank.com and www.virtualbank.com. These products and services include a broad array of commercial, consumer, mortgage, and private banking products and services, trust advisory services, cash management, deposit and annuity products. Certain of IBERIABANK’s non-bank subsidiaries engage in financial services-related activities, including brokerage services, sales of variable annuities, and wealth management services. Lenders Title offers a full line of title insurance and loan closing services throughout Arkansas, Tennessee and Louisiana. ICP provides equity research, institutional sales and trading and corporate finance services throughout the energy industry. 1887 Leasing owns an aircraft used by management of IBKC and its subsidiaries. IAM provides wealth management advisory services for commercial and private banking clients. CDE is engaged in the purchase of tax credits.

IBKC common stock is traded on the NASDAQ under the symbol “IBKC.”

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THE MERGER

This section of the joint proxy statement/prospectus describes material aspects of the merger. This summary may not contain all of the information that is important to you. You should carefully read this entire joint proxy statement/prospectus and the other documents we refer you to for a more complete understanding of the merger. In addition, we incorporate important business and financial information about each of us into this document by reference. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “Where You Can Find More Information” beginning on page 222.

Terms of the Merger

Each of First Horizon’s and IBKC’s respective boards of directors has approved and adopted the merger agreement. The merger agreement provides that IBKC will merge with and into First Horizon, with First Horizon as the surviving entity in a merger of equals. Following the completion of the merger, IBERIABANK, a subsidiary of IBKC, will merge with and into First Horizon Bank, a subsidiary of First Horizon, with First Horizon Bank as the surviving bank in the bank merger.

In the merger, each share of IBKC common stock issued and outstanding immediately prior to the effective time (other than certain shares held by First Horizon or IBKC) will be converted into the right to receive 4.584 shares of First Horizon common stock. No fractional shares of First Horizon common stock will be issued in connection with the merger, and holders of IBKC common stock will be entitled to receive cash in lieu thereof.

Also in the merger, each share of IBKC preferred stock issued and outstanding immediately prior to the effective time (other than dissenting shares) will be converted into the right to receive one (1) share of an applicable newly issued series of rollover First Horizon preferred stock having the same terms as the terms of such share of IBKC preferred stock.

Holders of First Horizon common stock and holders of IBKC common stock are being asked to approve the merger agreement. See “The Merger Agreement” beginning on page 144 for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.

Background of the Merger

Each of IBKC’s and First Horizon’s boards of directors (which we refer to as the “IBKC board” and the “First Horizon board,” respectively) and their respective senior managements have from time to time separately engaged in reviews and discussions of long-term strategies and objectives and have considered ways to enhance their respective companies’ performance and prospects in light of competitive, regulatory and other developments, all with the goal of increasing long-term value for their respective shareholders and taking into account the interests of their other constituencies. The strategic reviews and discussions have focused on, among other things, the business and regulatory environment facing financial institutions generally and IBKC and First Horizon, respectively, in particular, as well as conditions and trends in the banking industry, including assessments of ongoing consolidation in the financial services industry and the benefits and risks to First Horizon and IBKC, respectively, and their shareholders of strategic combinations compared to the benefits and risks of continued operation as a stand-alone company. Factors assessed in connection with these reviews have included the risks and opportunities associated with operating in existing and new markets, competition, potential positive and negative expense and revenue synergies, regulatory burdens, interest rate environment and prospects, scale, credit risk, unpredictable market risk, and rapid changes in technology. For each of IBKC and First Horizon, these reviews have also included discussions with respect to potential transactions that would further its strategic objectives and the potential benefits and risks of any such transactions, and both companies have engaged in acquisitions as part of their corporate strategies.

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Daryl Byrd, the President and Chief Executive Officer of IBKC, and Bryan Jordan, the Chairman and Chief Executive Officer of First Horizon, have periodically discussed with each other trends in the financial services industry and their respective institutions generally. These discussions occurred during meetings at investor and banking industry conferences and social settings. In 2016, Mr. Byrd and Mr. Jordan met and had a conceptual discussion regarding the possibility of a business combination between their companies, but both concluded they had other strategic initiatives of a higher priority to pursue at that time, including acquisitions of other banking organizations, and accordingly, no transaction discussions between the two companies were pursued. Mr. Jordan and Mr. Byrd did not further discuss a potential merger of First Horizon and IBKC until July 2019.

As part of its strategy, from time to time, First Horizon has evaluated potential strategic transactions with other banking institutions, occasionally acquired smaller banking institutions and pursued opportunities to acquire assets of other banking institutions, such as branch acquisitions. Prior to the execution of the merger agreement with IBKC, First Horizon had discussions with two institutions regarding potential strategic transactions, but neither of these discussions advanced beyond preliminary stages.

On March 19, 2019, at a regularly scheduled meeting of the IBKC board, the IBKC board discussed the changing competitive landscape highlighted by several recently announced large bank merger-of-equals transactions, as well as trends in deposit growth and technology spending by the largest U.S. banks. The IBKC board also discussed the potential opportunities for IBKC to engage in merger-and-acquisitions activity that could enhance long-term value for IBKC’s shareholders and its other constituencies in light of the increasing need for scale and technology investments in the banking industry and the current business and regulatory environment. Mr. Byrd updated the IBKC board on the work that management, with the assistance of IBKC’s financial advisors, had been doing to identify potential transaction counterparties for IBKC and to explore their level of interest in pursuing a strategic transaction. Mr. Byrd presented, and the IBKC board reviewed and discussed, a broad list of potential targets that IBKC could acquire, buyers who could acquire IBKC, and counterparties who could engage in a merger-of-equals transaction. The IBKC board indicated its support for management to continue, with the assistance of KBW and Goldman Sachs, reviewing potential counterparties for a strategic transaction and, where appropriate in their judgment, reaching out to such potential counterparties to explore their level of interest in pursuing a strategic transaction. At subsequent meetings of the IBKC board, Mr. Byrd further updated the IBKC board on the progress and results of this review and outreach process, including at the regularly scheduled July 16, 2019 board meeting where Mr. Byrd updated the board on preliminary conversations between representatives of First Horizon and IBKC regarding a possible business combination between the two companies. In addition, at this meeting the Board reviewed an overview provided by KBW and Goldman Sachs regarding current banking industry trends and a review of IBKC’s competitive position and potential merger partners.

At a meeting held July 22-23, 2019, Mr. Jordan briefed the First Horizon board on the general landscape for financial services mergers and acquisitions and the operating environment for financial institutions. At that meeting, Mr. Jordan reported on preliminary conversations between representatives of First Horizon and IBKC regarding a possible business combination between the two companies, and discussed with the First Horizon board the potential benefits and risks of considering IBKC as a partner in a strategic transaction as compared to other potential strategic combinations and other strategies that could be pursued by First Horizon. Following the July 22-23, 2019 First Horizon board meeting and continuing through the November 3, 2019 First Horizon board meeting, Mr. Jordan communicated updates to representatives of the First Horizon board regarding the status of discussions between representatives of First Horizon and IBKC and the progression of negotiations of key terms of the potential transaction, including with respect to compensation and retention matters.

On July 30, 2019, following discussions between representatives of First Horizon and IBKC, Mr. Byrd and Mr. Jordan spoke by telephone regarding First Horizon’s expressed interest in pursuing discussions regarding a possible strategic combination between the parties. During this discussion, Mr. Jordan and Mr. Byrd discussed that any strategic combination between the parties

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would be structured as a merger of equals, and Mr. Jordan proposed that the parties utilize an at-the-market exchange ratio to be set at the signing of a merger agreement. Mr. Byrd indicated he would brief his board on First Horizon’s interest at IBKC’s upcoming off-site retreat, and if the IBKC board was supportive of engaging in discussions with First Horizon, would arrange to meet in person with Mr. Jordan shortly thereafter. During the course of subsequent negotiations between the parties, no alternate formulation of the exchange ratio was proposed by either party, and it was agreed that the precise exchange ratio would be calculated based on the closing prices of the shares of each company on the last trading day prior to announcement.

On August 12 and 13, 2019, the IBKC board held an off-site retreat with representatives of management in attendance. One segment of this retreat included a broad strategic review during which the IBKC board, together with members of management, conducted an in-depth review of IBKC’s strengths, weaknesses and potential challenges, including risks with respect to the interest rate environment, uncertainty regarding potential changes in the regulatory and political climate, technology spending relative to competitors, industry consolidation and the fact that the largest U.S. banks continue to maintain and increase their size and scale. IBKC’s management also noted that in recent periods interest rate spreads had compressed, making earnings more volatile, and that banks with more scale could invest more in fee income businesses as well as in technology and their brand marketing. The IBKC board, with the assistance of management, also engaged in a detailed review of strategic alternatives, which included a discussion regarding the possibility of IBKC remaining independent, engaging in a merger of equals, resuming its strategy of acquiring smaller banks, or being acquired in a transaction in which IBKC’s shareholders would receive a premium. The IBKC board discussed the key benefits and risks of engaging in each such course of action. IBKC’s management noted that there were a very limited number of viable acquisition candidates which could meaningfully enhance IBKC’s strategic position, and likely no potential acquirers for IBKC at such time that would pay a significant premium. Management provided the IBKC board with an update on potential merger partners which had been contacted and the results of these discussions. Management noted that of the more than 16 banks contacted by or which reached out to management or IBKC’s financial advisors over the past year, management had engaged in substantive discussions with six which management had determined, after evaluation with the assistance of IBKC’s financial advisors, represented the most attractive potential transaction opportunities, but only two counterparties (First Horizon and another institution we refer to as “Party A”) presented potentially attractive and actionable strategic transaction alternatives at that time.

At this same meeting the IBKC board also reviewed an overview provided by KBW and Goldman Sachs of potential financial considerations for evaluating whether to engage in a transaction with First Horizon or with Party A. Mr. Byrd also updated the IBKC board with regard to his conversation with Mr. Jordan on July 30, 2019 and with regard to other preliminary conversations between representatives of First Horizon and representatives of IBKC involving key terms of a potential transaction. Such key terms included structuring the transaction as an all-stock merger using an at-the-market exchange ratio, having a board and management split proportionate to the share ownership of the two companies’ respective stockholders, and the respective roles of Mr. Byrd and Mr. Jordan and of Mr. Byrd’s potential compensation and retention arrangements relating to such role. After a discussion of the potential risks and benefits in pursuing the various strategic alternatives, and in particular a transaction with First Horizon or Party A, the IBKC board authorized management to engage in further discussions with First Horizon while also continuing to explore other potential strategic alternatives, including the pending discussions with Party A.

On August 14, 2019, Mr. Byrd and Mr. Jordan met in Nashville, Tennessee to further discuss the potential benefits of a merger-of-equals transaction between IBKC and First Horizon including, among other things, potential earnings accretion, a strengthened and diversified franchise and greater scale to invest in technology and the customer experience. Mr. Byrd and Mr. Jordan noted that their two companies had held preliminary merger discussions several years earlier, and discussed the changes in the operating environment since then that created heightened benefits to resuming those discussions now, including the need for greater scale and volatile interest rate and economic trends

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that created greater benefits from combining the two companies’ countercyclical businesses. Mr. Byrd and Mr. Jordan agreed that their respective chief financial officers should further discuss the compatibility of business models and operating cultures of the two companies as well as the feasibility and potential benefits of engaging in such a transaction.

On August 16, 22 and 30, 2019, the chief financial officers of IBKC and First Horizon discussed by telephone the process for engaging in due diligence of each other’s respective businesses, the importance of scale and technology, their respective approaches to client engagement and specialty businesses, their credit and risk management processes and other related topics. The chief financial officers concluded that IBKC’s and First Horizon’s businesses could complement each other and agreed to meet in person during the second week of September to continue their discussions.

Following these meetings and discussions, management of both companies agreed that further discussions would be facilitated by the exchange of nonpublic information. Accordingly, First Horizon and IBKC executed a mutual nondisclosure agreement on August 27, 2019.

On August 30, 2019, the Chief Executive Officer of Party A indicated to IBKC that, due to internal considerations, Party A was no longer interested in pursuing a strategic combination with IBKC at that time.

On September 11, 2019, the chief financial officers of IBKC and First Horizon met in Memphis, Tennessee to discuss the operational and financial feasibility of engaging in a merger-of-equals transaction, including a review of complementary businesses and markets, potential synergies, potential technology investments and employee culture and retention.

On September 12, 2019, Mr. Byrd and Mr. Jordan joined their respective chief financial officers in Memphis, Tennessee to further discuss the terms of a potential business combination. The discussion focused on both the “industrial logic” of the potential combination as well as key governance terms relevant to a merger of equals, including corporate name, headquarters, board split and similar matters.

On multiple occasions over the following weeks, the respective management teams of IBKC and First Horizon, with the assistance of their respective legal counsel and financial advisors, engaged in additional discussions with respect to corporate governance and a board and management structure designed to achieve meaningful participation by both companies in the future strategic direction of the combined company, the name of the combined company and the location of the combined company’s headquarters and major operational centers.

On September 16, 2019, the IBKC board held a regularly scheduled meeting at which representatives of management, KBW and Goldman Sachs were present. IBKC’s management briefed the IBKC board on the discussions with First Horizon to date, including the potential strategic benefits from increased scale and diversification as well as shareholder value creation through significant cost savings and synergies.

On September 27, 2019, Mr. Jordan and certain First Horizon independent directors had a meeting with Mr. Byrd and certain IBKC independent directors to continue discussions about a potential merger.

On October 1, 2019, the IBKC board held a special meeting, at which Mr. Byrd provided a summary of the September 27, 2019 meeting, as well as a follow-up telephone conversation he had with Mr. Jordan. The directors discussed the potential benefits and risks of the potential merger of equals with First Horizon. Mr. Byrd indicated to the IBKC board that he planned to meet with Mr. Jordan the following day to continue their discussions regarding the organization structure and related matters for the post-merger company, and that he would update the board following that meeting.

At a meeting on October 1, 2019, Mr. Jordan briefed the First Horizon board on the general landscape for financial services mergers and acquisitions and the operating environment for financial institutions. At that meeting, Mr. Jordan reported on the status of First Horizon’s bid to acquire branches to be divested by SunTrust Bank in connection with the merger of SunTrust Banks, Inc.

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and BB&T Corporation and also reported on the status of discussions between First Horizon and IBKC regarding a potential merger of equals between the parties. As part of this report, Mr. Jordan described to the First Horizon board key terms of the potential merger of equals with IBKC that had been discussed to date.

On October 2, 2019, Mr. Byrd and Mr. Jordan met together with their respective chief financial officers to discuss a proposed organizational structure of the combined company, and agreed upon the identities of the combined company’s top eight executive officers who would report directly to the chief executive officer. The parties also agreed to begin preparing electronic data rooms in order to facilitate each party’s due diligence review of the other.

On October 7, 2019, the IBKC board held a special meeting with members of IBKC’s management in attendance. At this meeting, Mr. Byrd provided an overview of the meeting that he had with Mr. Jordan on October 2, 2019. The IBKC board then discussed the potential benefits of the proposed transaction, including that the combined business would have almost 500 branches and that IBKC executives would serve in key positions of the combined business. Mr. Byrd confirmed for the IBKC board that First Horizon was proposing a no-premium at-the-market exchange ratio. The IBKC board agreed that management should continue to engage with First Horizon to negotiate a potential transaction.

On October 15, 2019, the IBKC board held a special meeting with members of IBKC’s management in attendance. Mr. Byrd and other members of management updated the IBKC board on the status of negotiations with First Horizon. Mr. Byrd then reviewed the process conducted to-date with respect to looking at alternative types of strategic transactions and potential counterparties, including with respect to a potential acquisition of IBKC, potential targets that could be acquired by IBKC and potential merger-of-equals partners for IBKC, and updated the IBKC board on management’s current assessment of the potential benefits of a combination with First Horizon, including with respect to scale, complementary businesses, financial performance and value for IBKC’s shareholders and other constituencies. The IBKC board discussed the various strategic alternatives that the IBKC board and management had evaluated over the past year and before. The board also reviewed its previous discussions regarding the potential benefits and risks of a transaction with First Horizon as compared to other alternatives available to IBKC, including those described in “—IBKC’s Reasons for the Merger; Recommendation of IBKC Board of Directors” beginning on page 79. Following further discussion, the IBKC board authorized IBKC’s management, with the assistance of IBKC’s financial and legal advisors, to continue their discussions with First Horizon regarding a potential business combination transaction.

Starting on October 18, 2019, First Horizon and IBKC made available to each other in virtual data rooms various documents for mutual due diligence review. Management teams from each of First Horizon and IBKC and the parties’ respective advisors reviewed these materials. First Horizon and IBKC and their respective legal advisors engaged in extensive due diligence, including a significant number of due diligence meetings and telephone calls between the parties to discuss various topics. On October 18 and 19, 2019, members of First Horizon management, including Mr. Jordan, met with members of IBKC management, including Mr. Byrd, off-site, to discuss the integration of the companies’ businesses and management teams if a merger of equals of First Horizon and IBKC were to go forward. Following those meetings and continuing until the merger agreement was executed, members of the management teams of both companies continued to have discussions in person and by phone regarding the potential integration of First Horizon and IBKC.

On October 20, 2019, Sullivan & Cromwell, LLP (which we refer to as “Sullivan & Cromwell”), legal counsel to First Horizon, sent a term sheet to Simpson Thacher & Bartlett LLP (which we refer to as “Simpson Thacher”), legal counsel to IBKC, which outlined the proposed terms of Mr. Byrd’s employment with First Horizon following the closing of a transaction, which Simpson Thacher forwarded to Mr. Byrd and his personal legal counsel. The term sheet outlined certain key aspects of Mr. Byrd’s employment with First Horizon following the closing of the proposed transaction, including his roles as executive chairman and special advisor to the chief executive officer of First Horizon and his compensation for his service in such roles. From October 20 through 22, 2019, First

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Horizon and Mr. Byrd, together with their respective legal counsel, continued to discuss such terms, which were later memorialized in the letter agreement between Mr. Byrd and First Horizon as described under “Interests of Certain IBKC Directors and Executive Officers in the Merger—Chairman Letter Agreement of Mr. Byrd.”

On October 22, 2019, the IBKC board met with members of IBKC’s management and representatives of Simpson Thacher, KBW and Goldman Sachs in attendance. IBKC’s management provided the IBKC board with an update regarding the status of the discussions and negotiations with First Horizon regarding the potential merger. KBW and Goldman Sachs reviewed with the IBKC board a preliminary analysis of certain financial aspects of the proposed transaction, including a comparison of the financial results of the two companies and their respective stock trading prices. A representative of Simpson Thacher then reviewed with the IBKC board certain legal matters, including the directors’ fiduciary duties, and also discussed illustrative terms that would be expected in a draft merger agreement to be provided by First Horizon as well as the current terms proposed by First Horizon for Mr. Byrd’s post-merger employment as reflected in the term sheet.

In the evening of October 22, 2019, Sullivan & Cromwell delivered an initial draft of the merger agreement to Simpson Thacher, which draft contemplated an all-stock merger based on a to-be-agreed fixed exchange ratio. Thereafter, the parties continued to negotiate the terms of, and exchanged drafts of, the merger agreement and related documentation.

On October 22 and 23, 2019, Mr. Jordan and other members of First Horizon senior management had discussions with Mr. Byrd and other members of IBKC senior management regarding business models, credit and other diligence matters.

On October 28, 2019, the IBKC board met, with members of management and representatives of KBW, Goldman Sachs and Simpson Thacher in attendance. The representatives of Simpson Thacher presented a summary of, and the IBKC board discussed, the principal terms of the merger agreement, taking into account revisions to be proposed by IBKC. The representatives of KBW and Goldman Sachs then discussed with the IBKC board, among other matters, the recent stock price performance of IBKC and First Horizon and other financial information of the two companies, as well as certain financial aspects of the proposed transaction. Members of management then reviewed with the IBKC board the status and process of IBKC’s ongoing due diligence regarding First Horizon, including IBKC’s preliminary diligence findings and the remaining diligence areas to be covered. Following the various presentations, the IBKC board discussed the terms, merits and risks of a potential transaction with First Horizon.

On October 28 and 29, 2019, the First Horizon board held a regularly scheduled two-day meeting. On October 28, 2019, Mr. Jordan provided the directors with information regarding the potential transaction with IBKC. On October 29, 2019, the First Horizon board met in executive session to discuss the potential transaction. Subsequently, members of management joined the meeting to provide directors with an overview of due diligence findings. Following the due diligence discussion, representatives of Morgan Stanley and Sullivan & Cromwell joined the meeting to discuss the financial, legal and regulatory implications of the potential merger. Representatives of Morgan Stanley provided directors with an overview of the strategic banking landscape, followed by a discussion of strategic alternatives to the proposed merger with IBKC and an overview of the transaction framework that had been discussed between First Horizon and IBKC senior management, including pricing and corporate governance terms. Morgan Stanley also provided directors with an overview of IBKC, prior mergers of equals in the banking industry and recent consolidation transactions in the banking industry and discussed certain preliminary considerations regarding the valuation of the two companies. Representatives of Sullivan & Cromwell next discussed the directors’ fiduciary duties in connection with the First Horizon board’s evaluation of the potential merger and strategic alternatives, the regulatory requirements for approvals of bank and bank holding company combination transactions, the regulatory environment for banks in general and for bank merger transactions in particular, and provided an overview of the terms of the draft of the potential merger agreement. The First Horizon board then continued in executive session to discuss the potential transaction. At the conclusion of the October 29, 2019 meeting, the

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First Horizon board of directors authorized First Horizon senior management to continue negotiating the terms of the potential merger of equals with IBKC.

On October 31, 2019, First Horizon provided IBKC with a draft of Mr. Jordan’s letter agreement with First Horizon with respect to Mr. Jordan’s employment with First Horizon following the merger, to be effective upon, and subject to, the closing of the merger. The letter agreement provides for the terms described under “Interests of Certain First Horizon Directors and Executive Officers in the Merger—Letter Agreement between First Horizon and Mr. Jordan”, including a waiver of Mr. Jordan’s right to terminate his employment for “good reason” solely as a result of the contemplated succession plan in connection with the merger.

In the afternoon of November 1, 2019, the Compensation Committee of the IBKC board held a special meeting that was attended by representatives of Simpson Thacher. The representatives of Simpson Thacher reviewed and discussed with the committee the terms of (i) a draft agreement to be entered into between Mr. Byrd and First Horizon regarding his employment and service with the combined company upon the closing of the merger, (ii) drafts of proposed retention agreements to be entered into by IBKC with certain of its key executives, (iii) the proposed acceleration of certain performance-based restricted stock awards concurrently with the signing of the merger agreement and (iv) the terms of IBKC equity awards proposed to be granted to Mr. Byrd concurrently with the signing of the merger agreement (all of which are further described under “Interests of Certain IBKC Directors and Executive Officers in the Merger”). Representatives of Simpson Thacher also reviewed and discussed with the committee the proposed treatment of IBKC equity awards under the merger agreement. Following a discussion, the IBKC Compensation Committee unanimously approved each of the foregoing matters.

In addition, following the close of trading on Friday, November 1, 2019, management of each of IBKC and First Horizon, and their respective financial advisors, discussed the exchange ratio for the potential merger agreement, and such managements determined to propose to their respective boards of directors a fixed exchange ratio of 4.584 shares of First Horizon common stock for each share of IBKC common stock in an all-stock merger, which represented an at-the-market exchange ratio based on the parties’ respective closing stock prices on November 1, 2019.

In the morning of November 2, 2019, the IBKC board convened a special meeting with representatives of IBKC’s management, KBW, Goldman Sachs and Simpson Thacher in attendance. The representatives of Simpson Thacher reviewed, and the IBKC board discussed, the proposed governance arrangements of the combined company, including with respect to the roles of Mr. Byrd and Mr. Jordan, the composition of the board of directors and committees thereof, and First Horizon’s commitment to contribute $20 million to a newly-formed foundation focused on community support in the State of Louisiana. The representatives of KBW and Goldman Sachs then separately discussed with the IBKC board, among other matters, certain financial aspects of the proposed transaction based on the 4.584 exchange ratio and certain financial information, and reviewed their respective financial analyses. Thereafter, members of management, including Mr. Byrd, and financial advisors left the meeting, and representatives of Simpson Thacher reviewed the actions taken by the IBKC Compensation Committee on November 1, 2019, including the key terms of the proposed employment agreement between Mr. Byrd and First Horizon, the grant of restricted stock to Mr. Byrd and the proposed retention agreements with certain of IBKC’s executive officers.

Throughout the rest of November 2, 2019 and during the following day, First Horizon’s and IBKC’s management teams and their respective financial and legal advisors continued to negotiate and finalize the merger agreement and other transaction documents.

In the evening of November 3, 2019, the IBKC board convened another special meeting, with representatives of IBKC’s management, KBW, Goldman Sachs and Simpson Thacher in attendance. The representatives of KBW provided the financial presentation of KBW to the IBKC board, and KBW rendered to the IBKC board an opinion to the effect that, as of that date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the merger was fair, from a financial point of view, to the holders of IBKC common shares. The representatives of

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Goldman Sachs then reviewed Goldman Sachs’s updated financial analyses of the proposed merger and rendered to the IBKC board Goldman Sachs’s oral opinion, subsequently confirmed in writing, attached to this joint proxy statement/prospectus as Annex D, to the effect that, as of November 3, 2019, the date of Goldman Sachs’ written opinion, and based upon and subject to the factors, qualifications and assumptions set forth in Goldman Sachs’ written opinion, the exchange ratio was fair from a financial point of view to the holders (other than First Horizon and its affiliates) of IBKC common shares. See “—Opinions of IBKC’s Financial Advisors” beginning on page 91. The representatives of Simpson Thacher in attendance reviewed the key terms of the merger agreement that had been negotiated since the previous meeting of the IBKC board and responded to questions regarding the potential transaction.

Following further discussion and after taking into consideration the matters discussed during the November 3, 2019 meeting and prior meetings of the IBKC board, including the factors described under “—IBKC’s Reasons for the Merger; Recommendation of IBKC Board of Directors” beginning on page 79, the IBKC board unanimously approved the merger agreement and the transactions contemplated thereby, including the proposed merger, and directed that the approval of the merger agreement be submitted to a vote at a meeting of the IBKC shareholders, and recommended that the IBKC shareholders approve the merger agreement.

At a special meeting on November 3, 2019, the First Horizon board considered the negotiated terms of the proposed merger and entry into the merger agreement by First Horizon. Morgan Stanley representatives reviewed with the First Horizon directors Morgan Stanley’s financial analysis summarized below under “—Opinion of First Horizon’s Financial Advisor” on page 82 and rendered to the board the oral opinion of Morgan Stanley, subsequently confirmed by delivery of a written opinion attached to this joint proxy statement/prospectus as Annex B, to the effect that, that as of the date of Morgan Stanley’s written opinion and subject to the various assumptions made, procedures followed, matters considered, and the qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to First Horizon. Representatives of Sullivan & Cromwell provided a summary of the proposed terms of the merger agreement and described the resolutions the First Horizon directors would be asked to consider if they were to approve the merger. The directors then discussed the potential advantages and risks to First Horizon of the proposed merger, including the factors described under “—First Horizon’s Reasons for the Merger; Recommendation of First Horizon Board of Directors” beginning on page 76, and asked First Horizon senior management a number of questions about the proposed merger. At the conclusion of the meeting, the First Horizon board unanimously approved the resolutions, including approving the proposed merger and entry into the merger agreement by First Horizon.

Following the meetings of the First Horizon board and the IBKC board on November 3, 2019, and after finalizing the merger agreement, First Horizon and IBKC executed the merger agreement on the evening of November 3, 2019. The transaction was announced the morning of November 4, 2019, before the opening of the financial markets in New York, in a press release jointly issued by First Horizon and IBKC.

First Horizon’s Reasons for the Merger; Recommendation of First Horizon’s Board of Directors

After careful consideration, the First Horizon board, at a special meeting held on November 3, 2019, unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and fair to and in the best interests of First Horizon and its shareholders, (ii) declared First Horizon’s entry into the merger agreement advisable and (iii) adopted and approved the merger agreement and the consummation of the transactions contemplated thereby, including the merger and the charter amendment. Accordingly, the First Horizon board unanimously recommends that the First Horizon shareholders vote “FOR” the First Horizon merger proposal, “FOR” the First Horizon charter amendment proposal, “FOR” the First Horizon compensation proposal and “FOR” the First Horizon adjournment proposal.

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In reaching the decision to approve the merger agreement, and to adopt the plan of merger and recommend approval of the plan of merger by First Horizon’s shareholders, the First Horizon board of directors evaluated the merger agreement, the merger and the other matters contemplated by the merger agreement in consultation with First Horizon senior management, as well as with First Horizon’s legal and financial advisors, and considered a number of factors, including the following:

 

 

each of First Horizon’s and IBKC’s business, operations, financial condition, stock performance, asset quality, earnings and prospects, and legal and regulatory compliance. In reviewing these factors, including the information obtained through due diligence, the First Horizon board of directors considered IBKC’s financial condition and asset quality; that First Horizon’s and IBKC’s respective businesses, operations and risk profiles complement each other; that the companies’ separate earnings and prospects create the opportunity for the combined company to leverage complementary and diversified revenue streams and to have superior future earnings and prospects compared to First Horizon’s earnings and prospects on a stand-alone basis;

 

 

the ability to leverage the combined company’s investments in technology across a greater number of customers;

 

 

the combined company’s position as one of the largest financial services organizations in the southern United States in terms of total consolidated assets, loans, deposits and revenues;

 

 

IBKC’s operations in high-growth southern U.S. banking markets, which enhances First Horizon’s footprint and deposit gathering opportunities in these fast growing markets;

 

 

the compatibility of First Horizon’s and IBKC’s cultures and credit philosophies;

 

 

the current environment in the financial services industry, including economic conditions and the interest rate and regulatory environments, increased operating costs resulting from regulatory and compliance mandates, increasing competition from both banks and non-bank financial and financial technology firms, current financial market conditions and the likely effects of these factors on First Horizon’s and the combined company’s potential growth, development, productivity and strategic options;

 

 

the governance structure for the combined company, including the composition of the board of directors and executive management;

 

 

First Horizon’s and IBKC’s past records of integrating acquisitions and of realizing expected financial and other benefits of such acquisitions;

 

 

the anticipated pro forma financial impact of the merger on the combined company, including earnings, dividends, return on equity, tangible book value dilution (and earn-back period), asset quality, liquidity and regulatory capital levels;

 

 

the expectation that the transaction would be generally tax-free for United States federal income tax purposes to First Horizon’s shareholders;

 

 

the oral opinion of Morgan Stanley, subsequently confirmed in Morgan Stanley’s written opinion, to the effect that, as of the date of Morgan Stanley’s written opinion and subject to the various assumptions made, procedures followed, matters considered, and the qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to First Horizon, as more fully described below in the section “—Opinion of First Horizon’s Financial Advisor” beginning on page 82;

 

 

the fact that the exchange ratio would be fixed, which the First Horizon board of directors believed was consistent with market practice for transactions of this type and with the strategic purpose of the transaction;

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its review and discussions with First Horizon’s senior management concerning the due diligence examination of the operations, financial condition and regulatory compliance programs and prospects of IBKC; and

 

 

its review with its financial advisors of the financial terms of the merger agreement and its review with its legal advisors of the other terms of the merger agreement, including the representations, covenants, deal protection and termination provisions.

The First Horizon board of directors also considered the potential risks related to the transaction. The board concluded that the anticipated benefits of combining with IBKC were likely to outweigh these risks substantially. These potential risks included:

 

 

the diversion of management focus and resources from other strategic opportunities and operational matters while working to implement the transaction and integrate the two companies;

 

 

the possibility of encountering difficulties in achieving cost savings and synergies in the amounts currently estimated or within the time frame currently contemplated;

 

 

the possibility of encountering difficulties in successfully integrating the businesses, operations and workforces of First Horizon and IBKC;

 

 

certain anticipated merger-related costs;

 

 

the regulatory and other approvals required in connection with the merger and the bank merger and the risk that such regulatory approvals will not be received in a timely manner or may impose unacceptable conditions;

 

 

the possibility that divestitures may be required by regulatory authorities in one or more markets in which First Horizon and IBKC compete;

 

 

the potential for legal claims challenging the merger;

 

 

the merger’s effect on the combined company’s regulatory capital levels; and

 

 

the other risks described under the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

The foregoing discussion of the information and factors considered by the First Horizon board of directors is not intended to be exhaustive, but includes the material factors considered by the board. In reaching its decision to approve the merger agreement, the merger, and the other transactions contemplated by the merger agreement, the First Horizon board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The board considered all these factors as a whole, including discussions with, and questioning of, First Horizon’s management and First Horizon’s independent financial and legal advisors, and overall considered the factors to support its determination.

For the reasons set forth above, the First Horizon board of directors determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of First Horizon, and adopted and approved the merger agreement and the transactions contemplated by it.

In considering the recommendation of the First Horizon board of directors, you should be aware that certain directors and executive officers of First Horizon may have interests in the merger that are different from, or in addition to, interests of shareholders of First Horizon generally and may create potential conflicts of interest. The First Horizon board was aware of these interests and considered them when evaluating and negotiating the merger agreement, the merger and the other transactions contemplated by the merger agreement, and in recommending to First Horizon’s shareholders that they vote in favor of the First Horizon merger proposal. See “The Merger—Interests of Certain First Horizon Directors and Executive Officers in the Merger.”

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It should be noted that this explanation of the reasoning of the First Horizon board of directors and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” on page 41.

IBKC’s Reasons for the Merger; Recommendation of IBKC’s Board of Directors

After careful consideration, the IBKC board, at a special meeting held on November 3, 2019, unanimously (i) determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of IBKC, its shareholders and other constituencies, (ii) declared the merger agreement advisable and (iii) approved the execution, delivery and performance of the merger agreement and the consummation of the transactions contemplated thereby, including the merger. Accordingly, the IBKC board unanimously recommends that the IBKC shareholders vote “FOR” the IBKC merger proposal, “FOR” the IBKC compensation proposal and “FOR” the IBKC adjournment proposal.

In reaching its decision to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger, and to recommend that IBKC’s shareholders approve the merger agreement, the IBKC board evaluated the merger agreement, the merger and the other transactions contemplated by the merger agreement in consultation with IBKC’s management, as well as with IBKC’s legal and financial advisors, and considered a number of factors, including the following:

 

 

each of IBKC’s and First Horizon’s business, operations, financial condition, stock performance, asset quality, earnings and prospects. In reviewing these factors, including the information obtained through due diligence, the IBKC board considered the following:

 

o

 

its view that the merger is a strategically compelling transaction that will create a stronger company, elevate growth and provide meaningful long-term value for the shareholders and other constituencies of both IBKC and First Horizon;

 

o

 

its view that the combination strengthens the competitive position of the combined business in high-growth, demographically attractive Southern markets, with a pro forma bank branch footprint located in 15 of the top 20 Southern metropolitan statistical areas by population and in 11 states throughout the combined footprint;

 

o

 

that shareholders of IBKC and First Horizon would benefit from expected annual cost synergies from maximizing efficiencies across the combined organization;

 

o

 

its view that combined organization will offer a broader and more comprehensive suite of products and services for commercial, consumer and small business clients;

 

o

 

its view that the combined company will be well positioned to capitalize on market opportunities and increase its client base through greater scale, strategic investments in advanced technologies and expanded product offerings;

 

o

 

its view that IBKC and First Horizon share a commitment to their respective customers, communities, shareholders and the employees;

 

o

 

its view that the combined company would have a more diversified business mix with the earnings streams from unique lending capabilities and distinct fee income businesses across a broader customer base;

 

o

 

its view that, in light of the agreed-upon governance arrangements, the combined company would have a stronger, deeper leadership team with complementary expertise to drive enhanced operational performance, strategic growth and risk management;

 

o

 

the anticipated impact of the transaction on the combined company, including the expected impact on financial metrics (including earnings per share, return on average assets, return on average tangible common equity and cash efficiency ratio);

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o

 

the historical performance of IBKC and First Horizon common shares; and

 

o

 

its review and discussions with IBKC’s management and its legal advisors concerning the due diligence review of First Horizon;

 

 

its familiarity of the current and prospective environment in the financial services industry, including economic conditions and the interest rate and regulatory environments, possible effects of scale, increased operating costs resulting from regulatory and compliance mandates, increasing competition from both nationwide banks and non-bank financial and financial technology firms, and current financial market conditions and the likely effects of these factors on IBKC’s and the combined company’s potential growth, development productivity and strategic options, and the likely effect of these factors on IBKC both with and without the proposed transaction;

 

 

its views with respect to other strategic alternatives potentially available to IBKC, including continuing as a standalone company focusing exclusively on organic growth, making smaller acquisitions of other banks, transformative transactions (including large acquisitions or a merger of equals) and a transaction involving the sale of IBKC;

 

 

the structure of the transaction as a merger of equals in which the IBKC board and IBKC’s management would have significant participation in the combined company; in particular, the provisions of the merger agreement setting forth the corporate governance of the combined company, including:

 

o

 

that, until the third anniversary of the consummation of the merger, the board of directors of the combined company would consist of seventeen members, with eight from IBKC and nine from First Horizon; and

 

o

 

that (i) Mr. Byrd, the current President and Chief Executive Officer of IBKC, would become and serve as the Executive Chairman of the combined company for two years following the consummation of the merger and (ii) other members of IBKC’s management would participate in the senior management of the combined company;

 

 

the consistency of the transaction with IBKC’s business strategies, including achieving strong earnings growth, reaching new markets, improving customer attraction and retention, developing technology capabilities and focusing on cost management;

 

 

the belief that the transaction is likely to increase value to shareholders, given that, from the perspective of an IBKC shareholder, the transaction is expected to be immediately accretive in 2020;

 

 

the expectation that the transaction will be generally tax-free for United States federal income tax purposes to IBKC shareholders;

 

 

the oral opinion of Goldman Sachs to the IBKC board to the effect that, subsequently confirmed in writing, as of November 3, 2019, the date of Goldman Sachs’ written opinion, and based upon and subject to the factors, qualifications and assumptions set forth in Goldman Sachs’ written opinion, the exchange ratio was fair from a financial point of view to the holders (other than First Horizon and its affiliates) of IBKC common shares, as more fully described below in the section “—Opinions of IBKC’s Financial Advisors—Opinion of Goldman Sachs & Co. LLC” beginning on page 101;

 

 

the opinion, dated November 3, 2019, of KBW to the IBKC board to the effect that, as of that date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the merger was fair, from a financial point of view, to the holders of IBKC common shares, as more fully described below under “—Opinions of IBKC’s Financial Advisors—Opinion of Keefe, Bruyette & Woods, Inc.” beginning on page 91;

 

 

the financial and other terms of the merger agreement, which IBKC reviewed with its outside financial and legal advisors, including:

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o

 

its expectation that, upon consummation of the merger, IBKC shareholders would own approximately 44% of the combined company;

 

o

 

the fact that the exchange ratio is fixed, which the IBKC board believed was consistent with market practice for transactions of this type and with the strategic purpose of the transaction;

 

o

 

the expectation of an immediate increase to IBKC shareholders in dividends per share based on anticipated dividend payments by the combined company, and the greater trading liquidity of First Horizon’s common stock;

 

o

 

the fact that IBKC’s shareholders will have an opportunity to vote on the approval of the merger agreement;

 

o

 

the right of the IBKC board under the merger agreement to withdraw its recommendation to the IBKC shareholders that they approve the merger agreement and the right of the First Horizon Board under the merger agreement to withdraw its recommendation to the First Horizon shareholders that they approve the merger agreement, in each case, in certain circumstances, as more fully described under “The Merger Agreement—Covenants and Agreements” and “The Merger Agreement—Termination of the Merger Agreement; Termination Fee” beginning on pages 150 and 158, respectively; and

 

o

 

the rights of IBKC and First Horizon to terminate the merger agreement in certain circumstances, as more fully described under “The Merger Agreement—Termination of the Merger Agreement; Termination Fee” beginning on page 158.

The IBKC board also considered the potential risks related to the transaction. The IBKC board concluded that the anticipated benefits of combining with First Horizon were likely to outweigh these risks substantially. These potential risks included:

 

 

the potential for the value of the merger consideration to be received by holders of shares of IBKC common stock to be adversely affected by a decrease in the trading price of First Horizon common stock;

 

 

the potential risks associated with achieving anticipated efficiency improvements and cost reductions and savings and successfully integrating IBKC’s business, operations and workforce with those of First Horizon;

 

 

the nature and amount of payments and other benefits to be received by IBKC’s management in connection with the merger pursuant to existing IBKC plans and compensation arrangements and the merger agreement;

 

 

the potential risk of diverting management attention and resources from the operation of IBKC’s business and towards the completion of the merger and the integration of the two companies;

 

 

the regulatory and other approvals required in connection with the merger and the expected likelihood that such regulatory approvals will be received in a reasonably timely manner and without the imposition of unacceptable conditions;

 

 

the restrictions on the conduct of IBKC’s business during the period between execution of the merger agreement and the consummation of the merger, which could potentially delay or prevent IBKC from undertaking business opportunities that might arise or certain other actions it might otherwise take with respect to its operations absent the pendency of the merger;

 

 

the potential effect of the merger on IBKC’s overall business, including its relationships with customers, employees, suppliers and regulators;

 

 

the risk of losing key IBKC or First Horizon employees during the pendency of the merger and thereafter;

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the substantial costs to be incurred in connection with the merger, including the costs of integrating the businesses of IBKC and First Horizon, transaction fees, expenses and other payments that will or may arise from the merger;

 

 

the fact that IBKC’s common shareholders would not be entitled to appraisal or dissenters’ rights in connection with the merger;

 

 

that IBKC’s directors and executive officers may have interests in the merger that are different from or in addition to those of its shareholders generally, as more fully described under “—Interests of Certain IBKC Directors and Executive Officers in the Merger” beginning on page 122;

 

 

that the merger may not be completed despite the combined efforts of IBKC and First Horizon or that completion may be unduly delayed, even if the required regulatory approvals are obtained and the requisite approvals are obtained from IBKC and First Horizon shareholders;

 

 

the fact that IBKC may be obligated to pay First Horizon a termination fee of $156 million in certain circumstances, as more fully described under “The Merger Agreement—Termination of the Merger Agreement”; Termination Fee” beginning on page 158, may deter others from proposing an alternative transaction that may be more advantageous to IBKC’s shareholders; and

 

 

the other risks described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 43 and 41, respectively.

The foregoing discussion of the information and factors considered by the IBKC board is not intended to be exhaustive and may not include all of the factors considered by the IBKC board. In view of the variety of factors considered in connection with its consideration of the merger and the other transactions contemplated by the merger agreement, and the complexity of these matters, the IBKC board did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The above factors are not listed in any particular order of priority. The IBKC board considered all these factors as a whole.

In considering the recommendation of the IBKC board, you should be aware that certain directors and executive officers of IBKC may have interests in the merger that are different from, or in addition to, interests of shareholders of IBKC generally and may create potential conflicts of interest. The IBKC board was aware of these interests and considered them when evaluating and negotiating the merger agreement, the merger and the other transactions contemplated by the merger agreement, and in recommending to IBKC’s shareholders that they vote in favor of the IBKC merger proposal. See “The Merger—Interests of Certain IBKC Directors and Executive Officers in the Merger” beginning on page 122.

It should be noted that this explanation of the reasoning of the IBKC board and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in “Cautionary Statement Regarding Forward-Looking Statements” on page 41.

Opinion of First Horizon’s Financial Advisor

First Horizon retained Morgan Stanley to provide it with financial advisory services in connection with a possible merger with IBKC, and, if requested by First Horizon, a financial opinion with respect thereto. First Horizon selected Morgan Stanley to act as its financial advisor based on Morgan Stanley’s qualifications, expertise and reputation and its knowledge of the business and affairs of First Horizon. Morgan Stanley rendered to the First Horizon board of directors at its special meeting on November 3, 2019, its oral opinion, subsequently confirmed by delivery of a written opinion dated November 3, 2019, that, as of such date, and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth therein, the exchange ratio pursuant to the merger agreement was fair, from a financial point of view, to First Horizon.

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The full text of the written opinion of Morgan Stanley, dated November 3, 2019, is attached as Annex B and incorporated by reference into this joint proxy statement/prospectus. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. Shareholders are urged to, and should, read the opinion carefully and in its entirety. Morgan Stanley’s opinion is directed to the First Horizon board of directors and addresses only the fairness, from a financial point of view, to First Horizon of the exchange ratio pursuant to the merger agreement as of the date of the opinion. Morgan Stanley’s opinion does not address any other aspect of the transactions contemplated by the merger agreement and does not constitute a recommendation to shareholders of First Horizon or shareholders of IBKC as to how to vote at any shareholders meetings held with respect to the merger or any other matter or whether to take any other action with respect to the merger. The summary of Morgan Stanley’s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. In addition, the opinion does not in any manner address the price at which First Horizon common stock will trade following the consummation of the merger or at any time.

For purposes of rendering its opinion, Morgan Stanley, among other things:

 

 

reviewed certain publicly available financial statements and other business and financial information of IBKC and First Horizon, respectively;

 

 

reviewed certain internal financial statements and other financial and operating data concerning IBKC and First Horizon, respectively;

 

 

reviewed certain financial projections furnished to Morgan Stanley by the managements of IBKC and First Horizon, respectively, which were derived from a consensus of selected Wall Street equity research financial forecasts identified by the managements of IBKC and First Horizon, which forecasts were extrapolated for certain fiscal years based on the guidance of First Horizon (such forecasts are referred to herein as the “IBKC Street Forecasts” and the “First Horizon Street Forecasts,” respectively, and collectively as the “Street Forecasts”;

 

 

reviewed information relating to certain strategic, financial and operational benefits anticipated from the merger, prepared by the managements of IBKC and First Horizon, respectively (such information is referred to herein as the “Synergies”;

 

 

discussed the past and current operations and financial condition and the prospects of IBKC, including information relating to certain strategic, financial and operational benefits anticipated from the merger, with senior executives of IBKC;

 

 

discussed the past and current operations and financial condition and the prospects of First Horizon, including information relating to certain strategic, financial and operational benefits anticipated from the merger, with senior executives of First Horizon;

 

 

reviewed the pro forma impact of the merger on First Horizon’s earnings per share, tangible book value per share, common equity Tier 1 ratio, cash flow, consolidated capitalization and certain financial ratios;

 

 

reviewed the reported prices and trading activity for IBKC common stock and First Horizon common stock;

 

 

compared the financial performance of IBKC and First Horizon and the prices and trading activity of IBKC common stock and First Horizon common stock with that of certain other publicly-traded companies comparable with IBKC and First Horizon, respectively, and their securities;

 

 

reviewed the financial terms, to the extent publicly available, of certain comparable merger transactions;

 

 

participated in certain discussions and negotiations among representatives of IBKC and First Horizon and their financial and legal advisors;

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reviewed the merger agreement and certain related documents; and

 

 

performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.

In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to it by First Horizon and IBKC, and formed a substantial basis for its opinion. At First Horizon’s direction, Morgan Stanley’s analysis relating to the business and financial prospects for IBKC and First Horizon for purposes of its opinion was made only on the basis of the Street Forecasts. Morgan Stanley was advised by IBKC and First Horizon, and assumed, with the consent of First Horizon, that the Street Forecasts were a reasonable basis upon which to evaluate the business and financial prospects of IBKC and First Horizon, respectively, and reflect the best currently available estimates of the future financial performance of IBKC and First Horizon, respectively. Morgan Stanley expressed no view as to the Street Forecasts or the assumptions on which they were based, including the selection of the equity research financial forecasts from which the Street Forecasts were derived. In addition, Morgan Stanley assumed that the merger will be consummated in accordance with the terms set forth in the merger agreement without any waiver, amendment or delay of any terms or conditions, including, among other things, that the merger will be treated as a tax-free reorganization, pursuant to the Code, and that the definitive merger agreement would not differ in any material respect from the draft thereof furnished to Morgan Stanley. Morgan Stanley assumed that in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed merger. Morgan Stanley is not an expert in the evaluation of allowance for loan losses, and it neither made an independent evaluation of the adequacy of the allowance for loan losses at IBKC or First Horizon, nor did it examine any individual loan credit files of IBKC or First Horizon nor was it requested to conduct such a review, and, as a result, Morgan Stanley assumed that the aggregate allowance for loan losses of IBKC and First Horizon, respectively, is adequate. Morgan Stanley is not a legal, tax, or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of First Horizon and IBKC and their legal, tax, or regulatory advisors with respect to legal, tax, or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the consideration pursuant to the merger agreement in respect of any series of preferred stock of IBKC. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of IBKC’s officers, directors or employees, or any class of such persons, relative to the consideration to be paid to the holders of shares of the IBKC common stock in the transaction. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of First Horizon or IBKC, nor was it furnished with any such valuations or appraisals. Morgan Stanley’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it, as of November 3, 2019. Events occurring after such date may affect Morgan Stanley’s opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.

Summary of Financial Analyses of Morgan Stanley

The following is a summary of the material financial analyses performed by Morgan Stanley in connection with its oral opinion and the preparation of its written opinion letter dated November 3, 2019. The various financial analyses summarized below were based on closing prices of First Horizon common stock and IBKC common stock as of November 1, 2019, the last full trading day preceding the day of the special meeting of the First Horizon board of directors to consider, approve, adopt and authorize the merger agreement. Some of these summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Furthermore, mathematical

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analysis (such as determining the average or median) is not in itself a meaningful method of using the data referred to below.

IBKC Standalone Analyses

IBKC Public Trading Comparables Analysis

Morgan Stanley performed a public trading comparables analysis, which is designed to provide an implied trading value of a company by comparing it to selected companies with similar characteristics to the company. Morgan Stanley compared certain financial information of IBKC with publicly available information for the selected companies. The selected companies were chosen based on Morgan Stanley’s knowledge of the industry and because these companies have businesses that may be considered similar to IBKC’s and First Horizon’s. The selected companies consisted of all publicly traded banks in the United States with total assets between $25 billion and $50 billion, excluding thrifts and Puerto Rican banks. The selected companies consisted of:

 

 

Signature Bank Corporation

 

 

Synovus Financial Corporation

 

 

TCF Financial Corporation

 

 

East West Bancorp Inc.

 

 

BOK Financial Corp

 

 

Wintrust Financial Corporation

 

 

F.N.B. Corporation

 

 

Valley National Bancorp

 

 

Texas Capital Bancshares Inc.

 

 

Cullen/Frost Bankers, Inc.

 

 

BankUnited, Inc.

 

 

Associated Banc-Corp

 

 

Hancock Whitney Corporation

 

 

Sterling Bancorp

 

 

Webster Financial Corp

 

 

Umpqua Holdings Corporation

 

 

Pinnacle Financial Partners, Inc.

 

 

PacWest Bancorp

 

 

Western Alliance Bancorporation

 

 

Commerce Bancshares, Inc.

In all instances, multiples were based on closing stock prices on November 1, 2019. For each of the following analyses performed by Morgan Stanley, financial and market data for the selected companies were based on the most recent publicly available information and Wall Street consensus estimates.

With respect to the selected companies, the information Morgan Stanley presented included:

 

 

multiple of price to estimated earnings per share for 2020, or Price / 2020E EPS; and

 

 

multiple of price to tangible book value per share, or Price / Tangible Book Value

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Selected
Companies’ Top
Quartile

 

Selected
Companies’
Median

 

Selected
Companies’
Bottom Quartile

 

IBKC

Price / 2020E EPS

 

 

 

11.3x

 

 

 

 

10.8x

 

 

 

 

9.9x

 

 

 

 

10.9x

 

Price / Tangible Book Value

 

 

 

1.8x

 

 

 

 

1.6x

 

 

 

 

1.4x

 

 

 

 

1.4x

 

Based on the analysis of the relevant metrics for each of the selected banks, Morgan Stanley selected a range of multiples and applied this range of multiples to the relevant financial statistics for IBKC. For purposes of this analysis, Morgan Stanley utilized estimated earnings per share for 2020 as set forth in the IBKC Street Forecasts and tangible book value per share of IBKC as of September 30, 2019 as set forth in IBKC’s public filings.

Morgan Stanley estimated the implied trading value per share of IBKC common stock as of November 1, 2019, as follows:

 

 

 

 

 

 

 

 

 

IBKC Metric

 

Multiple Statistic
Range

 

Implied Value Per
Share of IBKC
Common Stock

Price / 2020E EPS

 

 

$

 

6.84

 

 

 

 

9.5x – 11.5x

 

 

 

$

 

64.98 – $78.66

 

Price / Tangible Book Value

 

 

$

 

52.68

 

 

 

 

1.4x – 1.8x

 

 

 

$

 

73.75 – $94.83

 

Morgan Stanley also did a regression-based analysis based on Price / Tangible Book Value versus 2020 return on tangible common equity for each of the selected companies. The range of estimated regression-based analysis implied values represents +/- 10% of the value implied by the regression line equation. The low-end range of $69.23 represents the implied value if IBKC were valued at 90% of the value implied by the regression line and the high-end range of $84.62 represents the implied value if IBKC were valued at 110% of the value implied by the regression line. For purposes of this analysis, Morgan Stanley utilized a 2020 return on tangible common equity estimate for IBKC of 12.7%, as set forth in the IBKC Street Forecasts.

No company in the public trading comparables analysis is identical to IBKC. In evaluating the group of selected companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of IBKC, such as the impact of competition on the business of IBKC or the industry generally, industry growth and the absence of any material adverse change in the financial condition and prospects of IBKC or the industry or in the financial markets in general. Mathematical analysis, such as determining the average or median, is not in itself a meaningful method of using peer group data.

IBKC Dividend Discount Analysis

Using the IBKC Street Forecasts and assuming, at the direction of First Horizon management, that IBKC would make distributions of capital in excess of the amount necessary to achieve a 9.25% common equity Tier 1 ratio level, Morgan Stanley performed a dividend discount analysis for IBKC on a standalone basis. Morgan Stanley calculated a range of implied values per share of IBKC common stock based on the sum of the discounted present values of (1) projected dividends on shares of IBKC common stock for the fourth quarter of 2019 through December 31, 2024 and (2) a projected terminal value of IBKC common stock as of December 31, 2024.

Morgan Stanley based its analysis on a range of terminal forward multiples of 9.0x to 11.0x to the terminal year 2025 estimated earnings, 7.4% to 9.4% discount rates, using the capital asset pricing model, and a 1.50% opportunity cost of cash. Utilizing the range of discount rates and terminal value multiples, Morgan Stanley derived an implied valuation range of present value indications per share of IBKC common stock ranging from $70.50 to $87.25.

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First Horizon Standalone Analyses

First Horizon Public Trading Comparables Analysis

Morgan Stanley performed a public trading comparables analysis, which is designed to provide an implied trading value of a company by comparing it to selected companies with similar characteristics to the company. Morgan Stanley compared certain financial information of First Horizon with publicly available information for the selected companies, as identified above under “IBKC Standalone Analyses—IBKC Public Trading Comparables Analysis.”

In all instances, multiples were based on closing stock prices on November 1, 2019. For each of the following analyses performed by Morgan Stanley, financial and market data for the selected companies were based on the most recent publicly available information and Wall Street consensus estimates.

With respect to the selected companies, the information Morgan Stanley presented included:

 

 

multiple of price to estimated earnings per share for 2020, or Price / 2020E EPS; and

 

 

multiple of price to tangible book value per share, or Price / Tangible Book Value

 

 

 

 

 

 

 

 

 

 

 

Selected
Companies’ Top
Quartile

 

Selected
Companies’
Median

 

Selected
Companies’
Bottom Quartile

 

First Horizon

Price / 2020E EPS

 

 

 

11.3x

 

 

 

 

10.8x

 

 

 

 

9.9x

 

 

 

 

10.1x

 

Price / Tangible Book Value

 

 

 

1.8x

 

 

 

 

1.6x

 

 

 

 

1.4x

 

 

 

 

1.7x

 

Based on the analysis of the relevant metrics for each of the selected banks, Morgan Stanley selected a range of multiples and applied this range of multiples to the relevant financial statistics for First Horizon. For purposes of this analysis, Morgan Stanley utilized estimated earnings per share for 2020 as set forth in the First Horizon Street Forecasts and tangible book value per share of First Horizon as of September 30, 2019 as set forth in First Horizon’s public filings.

Morgan Stanley estimated the implied trading value per share of First Horizon common stock as of November 1, 2019, as follows:

 

 

 

 

 

 

 

 

 

First Horizon
Metric

 

Multiple Statistic
Range

 

Implied Value Per Share
of First Horizon
Common Stock

Price / 2020E EPS

 

 

$

 

1.61

 

 

 

 

9.5x – 11.5x

 

 

 

$

 

15.31 – $18.53

 

Price / Tangible Book Value

 

 

$

 

9.76

 

 

 

 

1.4x – 1.8x

 

 

 

$

 

13.66 – $17.56

 

Morgan Stanley also did a regression-based analysis based on Price / Tangible Book Value versus 2020 return on tangible common equity for each of the selected companies. The range of estimated regression-based analysis implied values represents +/- 10% of the value implied by the regression line equation. The low-end range of $15.51 represents the implied value if First Horizon were valued at 90% of the value implied by the regression line and the high-end range of $18.95 represents the implied value if First Horizon were valued at 110% of the value implied by the regression line. For purposes of this analysis, Morgan Stanley utilized a 2020 return on tangible common equity estimate for First Horizon of 15.9%, as set forth in the First Horizon Street Forecasts.

No company in the public trading comparables analysis is identical to First Horizon. In evaluating the group of selected companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of First Horizon, such as the impact of competition on the business of First Horizon or the industry generally, industry growth and the absence of any material adverse change in the financial condition and prospects of First Horizon or the industry or in the financial markets in general. Mathematical analysis, such as determining the average or median, is not in itself a meaningful method of using peer group data.

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First Horizon Dividend Discount Analysis

Using the First Horizon Street Forecasts and assuming, at the direction of First Horizon management, that First Horizon would make distributions of capital in excess of the amount necessary to achieve a 9.25% common equity Tier 1 ratio level, Morgan Stanley performed a dividend discount analysis for First Horizon on a standalone basis. Morgan Stanley calculated a range of implied values per share of First Horizon common stock based on the sum of the discounted present values of (1) projected dividends on shares of First Horizon common stock for the fourth quarter of 2019 through December 31, 2024 and (2) a projected terminal value of First Horizon common stock as of December 31, 2024.

Morgan Stanley based its analysis on a range of terminal forward multiples of 9.0x to 11.0x to the terminal year 2025 estimated earnings, 7.3% to 9.3% discount rates, using the capital asset pricing model, and a 1.50% opportunity cost of cash. Utilizing the range of discount rates and terminal value multiples, Morgan Stanley derived an implied valuation range of present value indications per share of First Horizon common stock ranging from $15.30 to $19.32.

Contribution Analysis

Morgan Stanley compared IBKC’s and First Horizon’ respective percentage contributions for certain financial metrics described below to the combined company. Morgan Stanley utilized First Horizon’s and IBKC’s respective balance sheet as of September 30, 2019 and estimates of net income for calendar years 2020 and 2021 as set forth in the Street Forecasts. The following table summarizes Morgan Stanley’s analysis, as compared to the 56% (First Horizon) and 44% (IBKC) ownership of the combined company resulting from the exchange ratio of 4.584x provided for in the merger agreement:

 

 

 

 

 

 

 

IBKC Contribution

 

First Horizon
Contribution

Total Assets

 

 

 

42

%

 

 

 

 

58

%

 

Loans

 

 

 

43

%

 

 

 

 

57

%

 

Deposits

 

 

 

44

%

 

 

 

 

56

%

 

Common Equity

 

 

 

47

%

 

 

 

 

53

%

 

Tangible Common Equity

 

 

 

48

%

 

 

 

 

52

%

 

2020E Net Income

 

 

 

42

%

 

 

 

 

58

%

 

2021E Net Income

 

 

 

42

%

 

 

 

 

58

%

 

Exchange Ratios Analysis

Using the implied value per share reference ranges for IBKC and First Horizon indicated in the public trading comparables analyses and the dividend discount analyses of IBKC and First Horizon described above, and the percentage contributions indicated in the contribution analyses described above, Morgan Stanley calculated ranges of implied exchange ratios of IBKC common stock into First Horizon common stock. Other than for the contribution analyses, the implied exchange ratios represent the range of high-to-low and low-to-high exchange ratios implied by the respective valuation analyses. For the contribution analyses, the implied exchange ratio represents the high and low exchange ratios implied by the individual balance sheet and net income contribution analyses. This implied exchange ratio analysis indicated the following implied exchange ratio reference ranges, as compared to the exchange ratio of 4.584x provided for in the merger agreement:

 

 

 

 

 

Implied Exchange Ratio

Public Trading Comparables

 

 

Price / 2020 E EPS

 

 

 

3.506x – 5.138x

 

Price / Tangible Book Value

 

 

 

4.200x – 6.943x

 

Regression Based

 

 

 

3.653x – 5.457x

 

Dividend Discount Analysis

 

 

 

3.649x – 5.702x

 

Contribution Analysis

 

 

 

4.224x – 5.400x

 

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Morgan Stanley also reviewed the historical trading prices for IBKC common stock and First Horizon common stock from November 1, 2016 to November 1, 2019 and calculated implied historical exchange ratios by dividing the average daily closing price per share of IBKC common stock by the average daily closing price per share of First Horizon common stock. This implied historical exchange ratio analysis indicated the following historical exchange ratios, as compared to the exchange ratio of 4.584x provided for in the merger agreement:

 

 

 

 

 

Implied Exchange Ratio

November 1, 2019

 

 

 

4.584x

 

One-Month Average

 

 

 

4.671x

 

Two-Month Average

 

 

 

4.632x

 

Three-Month Average

 

 

 

4.587x

 

Six-Month Average

 

 

 

4.882x

 

One-Year Average

 

 

 

4.911x

 

Three-Year Average

 

 

 

4.513x

 

The historical exchange ratios were presented for reference purposes only, and were not relied upon for valuation purposes.

Pro Forma Accretion/Dilution Analysis

Morgan Stanley reviewed and analyzed the estimated pro forma impact of the merger on (i) projected accretion/(dilution) to holders of First Horizon common stock for the years 2021 and 2022, (ii) tangible book value per share as of the closing date and (iii) common equity Tier 1 ratio as of the closing date, in each case based on the Street Forecasts and the Synergies. For purposes of the tangible book value per share and common equity Tier 1 ratio analyses, Morgan Stanley utilized an estimated closing date of June 30, 2020. Based on these analyses, Morgan Stanley calculated (a) an estimated pro forma accretive impact to earnings per share for holders of First Horizon common stock of 12% and 16% for 2021 and 2022, respectively, (b) an estimated pro forma dilutive impact on tangible book value per share as of the closing date of 5%, assuming the full impact of one-time merger-related expenses, and (c) an estimated pro forma dilutive impact on common equity Tier 1 ratio as of the closing date of 20 basis points, assuming the impact of estimated one-time merger-related expenses incurred prior to or around closing. Any such estimates are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by the estimates.

Pro Forma Dividend Discount Analysis

Using the Street Forecasts, the Synergies and other fair market value and transaction adjustments and assuming, at the direction of First Horizon management, that First Horizon would make distributions of capital in excess of the amount necessary to achieve a 9.25% common equity Tier 1 ratio level, Morgan Stanley performed a dividend discount analysis for First Horizon on a pro forma basis after giving effect to the merger. Morgan Stanley calculated a range of implied values per share of First Horizon common stock based on the sum of the discounted present values of (1) projected dividends on shares of First Horizon common stock as of the estimated closing date for the third quarter of 2020 through December 31, 2025 and (2) a projected terminal value of First Horizon common stock as of December 31, 2025.

Morgan Stanley based its analysis on a range of terminal forward multiples of 9.0x to 11.0x to the terminal year 2026 estimated earnings, 7.3% to 9.3% discount rates, using the capital asset pricing model, and a 1.50% opportunity cost of cash. Utilizing the range of discount rates and terminal value multiples, Morgan Stanley derived an implied valuation range of present value indications per share of First Horizon common stock ranging from $17.30 to $22.01.

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General

In connection with the review of the merger by First Horizon’s board of directors, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of First Horizon or IBKC. In performing its analyses, Morgan Stanley made numerous assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters which are beyond the control of First Horizon or IBKC. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness, from a financial point of view to First Horizon of the exchange ratio pursuant to the merger agreement, and in connection with the delivery of its oral opinion, and its subsequent written opinion, to First Horizon’s board of directors. These analyses do not purport to be appraisals or to reflect the prices at which First Horizon common stock or IBKC common stock might actually trade. Morgan Stanley expressed no opinion or recommendation as to how the shareholders of First Horizon and IBKC should vote at the shareholders’ meetings to be held in connection with the merger.

The exchange ratio was determined through arm’s-length negotiations between First Horizon and IBKC and was approved by First Horizon’s board of directors. Morgan Stanley provided advice to First Horizon during these negotiations but did not, however, recommend any specific exchange ratio to First Horizon or IBKC, or that any specific exchange ratio constituted the only appropriate exchange ratio for the merger.

Morgan Stanley’s opinion and its presentation to First Horizon’s board of directors was one of many factors taken into consideration by First Horizon’s board of directors in deciding to approve, adopt and authorize the merger agreement and approve the transactions contemplated thereby, including the merger. Consequently, the analyses as described above should not be viewed as determinative of the opinion of First Horizon’s board of directors with respect to the exchange ratio pursuant to the merger agreement or of whether First Horizon’s board of directors would have been willing to agree to a different exchange ratio. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with its customary practice.

First Horizon’s board of directors retained Morgan Stanley based upon Morgan Stanley’s qualifications, experience and expertise. Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Its securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of First Horizon, IBKC or any other company, or any currency or commodity, that may be involved in this transaction, or any related derivative instrument.

Under the terms of its engagement letter, as compensation for its services relating to the merger, First Horizon has agreed to pay Morgan Stanley a fee of $28 million in the aggregate, $5 million of

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which was payable upon the rendering of its opinion and $23 million of which is contingent upon the consummation of the merger. First Horizon has also agreed to reimburse Morgan Stanley for its reasonable expenses incurred in performing its services. In addition, First Horizon has agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under the federal securities laws, related to or arising out of Morgan Stanley’s engagement. During the two years preceding the date of delivery of Morgan Stanley’s written opinion, Morgan Stanley and its affiliates have provided financial advisory and financing services to First Horizon for which Morgan Stanley and its affiliates have received aggregate fees of approximately $5 million. Morgan Stanley may also seek to provide financial advisory and financing services to First Horizon, IBKC and their respective affiliates in the future and would expect to receive fees for the rendering of these services.

Opinions of IBKC’s Financial Advisors

Opinion of Keefe, Bruyette & Woods, Inc.

IBKC engaged KBW to render financial advisory and investment banking services to IBKC, including an opinion to the IBKC board of directors as to the fairness, from a financial point of view, to the holders of IBKC common stock of the exchange ratio in the proposed merger of IBKC with and into First Horizon. IBKC selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of its engagement, representatives of KBW participated telephonically in the meeting of the IBKC board held on November 3, 2019, at which the IBKC board evaluated the proposed merger. At this meeting, KBW rendered to the IBKC board an opinion to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in its opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to the holders of IBKC common stock. The IBKC board approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Annex C to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the IBKC board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the merger to the holders of IBKC common stock. It did not address the underlying business decision of IBKC to engage in the merger or enter into the merger agreement or constitute a recommendation to the IBKC board in connection with the merger, and it does not constitute a recommendation to any holder of IBKC common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation regarding whether or not any such shareholder should enter into a voting, shareholders’, or affiliates’ agreement with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of IBKC and First Horizon and bearing upon the merger, including, among other things:

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a draft of the merger agreement dated November 3, 2019 (the most recent draft made available to KBW);

 

 

the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended December 31, 2018 of IBKC;

 

 

the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019 of IBKC;

 

 

certain unaudited quarterly financial results for the quarter ended September 30, 2019 of IBKC (contained in the Current Report on Form 8-K filed by IBKC with the Securities and Exchange Commission on October 18, 2019);

 

 

the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2018 of First Horizon;

 

 

the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019 of First Horizon;

 

 

certain unaudited quarterly financial results for the quarter ended September 30, 2019 of First Horizon (contained in the Current Report on Form 8-K filed by First Horizon with the Securities and Exchange Commission on October 16, 2019);

 

 

certain regulatory filings of IBKC and First Horizon and their respective subsidiaries, including the quarterly reports on Form FR Y-9C and call reports filed with respect to each quarter during the three-year period ended December 31, 2018 as well as the quarters ended March 31, 2019 and June 30, 2019, and in the case of IBERIABANK and First Horizon Bank, September 30, 2019;

 

 

certain other interim reports and other communications of IBKC and First Horizon to their respective shareholders; and

 

 

other financial information concerning the businesses and operations of IBKC and First Horizon that was furnished to KBW by IBKC and First Horizon or which KBW was otherwise directed to use for purposes of KBW’s analyses.

KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

 

 

the historical and current financial position and results of operations of IBKC and First Horizon;

 

 

the assets and liabilities of IBKC and First Horizon;

 

 

a comparison of certain financial and stock market information for IBKC and First Horizon with similar information for certain other companies the securities of which were publicly traded;

 

 

financial and operating forecasts and projections of IBKC that were prepared by IBKC management, provided to and discussed with KBW by IBKC management, and used and relied upon by KBW at the direction of such management and with the consent of the IBKC board;

 

 

financial and operating forecasts and projections of First Horizon with respect to fiscal years 2019 and 2020 that were prepared by First Horizon management, provided to and discussed with KBW by First Horizon management, and used and relied upon by KBW based on such discussions, at the direction of IBKC management and with the consent of the IBKC board;

 

 

financial and operating forecasts and projections of First Horizon with respect to certain fiscal years beyond 2020 that were prepared by IBKC management, provided to and discussed with KBW by IBKC management and used and relied upon by KBW at the direction of such management and with the consent of the IBKC board; and

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estimates regarding certain pro forma financial effects of the merger on First Horizon (including, without limitation, the cost savings and related expenses expected to result or be derived from the merger) that were prepared by First Horizon management, provided to and discussed with KBW by First Horizon management, and used and relied upon by KBW based on such discussions, at the direction of IBKC management and with the consent of the IBKC board.

KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also participated in discussions held by the managements of IBKC and First Horizon regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as KBW deemed relevant to its inquiry.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information that was provided to KBW or that was publicly available and KBW did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied upon the management of IBKC as to the reasonableness and achievability of the financial and operating forecasts and projections of IBKC and the financial and operating forecasts and projections of First Horizon with respect to certain fiscal years beyond 2020, all as referred to above (and the assumptions and bases for all such information), and KBW assumed that all such information was reasonably prepared on a basis reflecting the best currently available estimates and judgments of such management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated by such management. KBW further relied upon First Horizon management, with the consent of IBKC, as to the reasonableness and achievability of the financial and operating forecasts and projections of First Horizon (with respect to fiscal years 2019 and 2020) and the estimates regarding certain pro forma financial effects of the merger on First Horizon (including, without limitation, the cost savings and related expenses expected to result or be derived from the merger), all as referred to above (and the assumptions and bases for all such information), and KBW assumed that all such information was reasonably prepared on a basis reflecting the best currently available estimates and judgments of First Horizon management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated by such management.

It is understood that the foregoing financial information of IBKC and First Horizon that was provided to KBW was not prepared with the expectation of public disclosure and that the foregoing financial information was based on numerous variables and assumptions that are inherently uncertain (including, without limitation, factors related to general economic and competitive conditions) and, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with the respective managements of IBKC and First Horizon and with the consent of the IBKC board, that all such information provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either IBKC or First Horizon since the date of the last financial statements of each such entity that were made available to KBW. KBW is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and KBW assumed, without independent verification and with IBKC’s consent, that the aggregate allowances for loan and lease losses for IBKC and First Horizon are adequate to cover such losses. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of IBKC or First Horizon, the collateral

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securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did it evaluate the solvency, financial capability or fair value of IBKC or First Horizon under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, they should not be taken as KBW’s view of the actual value of such companies or assets.

KBW assumed, in all respects material to its analyses:

 

 

that the merger and any related transactions (including, without limitation, the bank subsidiary merger) would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which KBW assumed would not differ in any respect material to KBW’s analyses from the draft reviewed by KBW and referred to above) with no adjustments to the exchange ratio and with no other consideration or payments in respect of IBKC common stock;

 

 

that the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct;

 

 

that each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;

 

 

that there were no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the merger or any related transactions and that all conditions to the completion of the merger and any related transaction would be satisfied without any waivers or modifications to the merger agreement or any of the related documents; and

 

 

that in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger and any related transaction, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of IBKC, First Horizon or the pro forma entity, or the contemplated benefits of the merger, including without limitation the cost savings and related expenses expected to result or be derived from the merger.

KBW assumed that the merger would be consummated in a manner that complies with the applicable provisions of the Securities Act, the Exchange Act and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of IBKC that IBKC relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to IBKC, First Horizon, the merger and any related transaction, and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of the opinion, of the exchange ratio in the merger to the holders of IBKC common stock. KBW expressed no view or opinion as to any other terms or aspects of the merger or any term or aspect of any related transaction, including without limitation, the form or structure of the merger or any such related transaction, any consequences of the merger or any such related transaction to IBKC, its shareholders, creditors or otherwise, the treatment of IBKC’s outstanding preferred stock in the merger, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the merger or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of such opinion and the information made available to KBW through such date. Developments subsequent to the date of KBW’s opinion may have affected, and may affect, the conclusion reached in KBW’s opinion and KBW did not and does not

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have an obligation to update, revise or reaffirm its opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

 

 

the underlying business decision of IBKC to engage in the merger or enter into the merger agreement;

 

 

the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by IBKC or the IBKC board;

 

 

the fairness of the amount or nature of any compensation to any of IBKC’s officers, directors or employees, or any class of such persons, relative to the compensation to the holders of IBKC common stock;

 

 

the effect of the merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of IBKC (other than the holders of IBKC common stock, solely with respect to the exchange ratio, as described in KBW’s opinion and not relative to the consideration to be received by holders of any other class of securities) or holders of any class of securities of First Horizon or any other party to any transaction contemplated by the merger agreement;

 

 

the actual value of First Horizon common stock to be issued in the merger;

 

 

the prices, trading range or volume at which IBKC common stock and First Horizon common stock would trade following the public announcement of the merger or the prices, trading range or volume at which First Horizon common stock would trade following the consummation of the merger;

 

 

any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated by the merger agreement; or

 

 

any legal, regulatory, accounting, tax or similar matters relating to IBKC, First Horizon, their respective shareholders, or relating to or arising out of or as a consequence of the merger or any related transaction (including the subsidiary bank merger), including whether or not the merger would qualify as a tax-free reorganization for United States federal income tax purposes.

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, IBKC and First Horizon. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, KBW’s opinion was among several factors taken into consideration by the IBKC board in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the IBKC board with respect to the fairness of the exchange ratio. The type and amount of consideration payable in the merger were determined through negotiation between IBKC and First Horizon and the decision of IBKC to enter into the merger agreement was solely that of the IBKC board.

The following is a summary of the material financial analyses presented by KBW to the IBKC board in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by KBW to the IBKC board, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at

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its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

Implied Transaction Statistics for the Proposed Merger. Utilizing an implied transaction value for the proposed merger of $74.77 per outstanding share of IBKC common stock based on the 4.584x exchange ratio in the proposed merger and the closing price of First Horizon common stock on November 1, 2019, KBW reviewed with the IBKC board of directors, among other things, the following implied transaction statistics for the proposed merger, which (as indicated below) were based on historical financial information of IBKC and either earnings per share (“EPS”) consensus “street estimates” for IBKC or internal EPS estimates for IBKC provided by IBKC management:

 

 

 

Price / September 30, 2019 Tangible Book Value per Share

 

 

 

1.42x

 

 

 

 

 

 

 

 

Based on
“Street” Estimates

 

Based on
Internal Estimates

Price / 2019 Earnings per Share

 

 

 

10.5x

 

 

 

 

10.6x

 

Price / 2020 Earnings per Share

 

 

 

11.0x

 

 

 

 

10.6x

 

Price / 2021 Earnings per Share

 

 

 

10.3x

 

 

 

 

10.3x

 

IBKC and First Horizon Selected Companies Analysis. Using publicly available information, KBW compared the financial performance, financial condition and market performance of IBKC and First Horizon to nine publicly-traded banks and thrifts in the Southeast, Texas and Louisiana with total assets between $20.0 billion and $50.0 billion. Merger targets and mutual holding companies were excluded from the selected companies.

The selected companies were as follows:

 

 

 

Bank OZK

 

 

BankUnited, Inc.

 

 

Cullen/Frost Bankers, Inc.

 

 

First Citizens BancShares, Inc.

 

 

Hancock Whitney Corporation

 

 

Pinnacle Financial Partners, Inc.

 

 

Prosperity Bancshares, Inc.

 

 

Synovus Financial Corp.

 

 

Texas Capital Bancshares, Inc.

 

 

To perform this analysis, KBW used profitability and other financial information for the latest 12 months (“LTM”) available or as of the end of the most recent quarter available and market price information as of November 1, 2019. KBW also used 2019, 2020 and 2021 EPS estimates taken from publicly available consensus “street estimates” for IBKC, First Horizon and the eight selected companies for which consensus “street estimates” were available. Certain financial data prepared by KBW, as referenced in the tables presented below, may not correspond to the data presented in IBKC’s or First Horizon’s historical financial statements, or the data prepared by Goldman Sachs presented under the section “The Merger—Opinions of IBKC’s Financial Advisors—Opinion of Goldman Sachs & Co. LLC” or Morgan Stanley presented under the section “The Merger—Opinion of First Horizon’s Financial Advisor,” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance of IBKC, First Horizon and the selected companies:

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IBKC

 

First
Horizon

 

Selected Companies

 

Bottom
Quartile

 

Median

 

Average

 

Top
Quartile

LTM Core Return on Average Assets (%)(1)

 

 

 

1.31

(3)

 

 

 

 

1.22

 

 

 

 

1.20

 

 

 

 

1.36

 

 

 

 

1.37

 

 

 

 

1.48

 

LTM Core Return on Average Tangible Common Equity (%)(1)

 

 

 

15.3

(3)

 

 

 

 

16.4

 

 

 

 

14.0

 

 

 

 

15.3

 

 

 

 

14.7

 

 

 

 

16.2

 

LTM Net Interest Margin (%)

 

 

 

3.60

 

 

 

 

3.31

 

 

 

 

3.42

 

 

 

 

3.47

 

 

 

 

3.57

 

 

 

 

3.76

 

LTM Fee Income / Revenue Ratio (%)(2)

 

 

 

18.2

 

 

 

 

32.6

 

 

 

 

13.0

 

 

 

 

18.1

 

 

 

 

18.4

 

 

 

 

25.9

 

LTM Efficiency Ratio (%)

 

 

 

52.1

 

 

 

 

60.0

 

 

 

 

58.4

 

 

 

 

53.2

 

 

 

 

51.9

 

 

 

 

46.2

 

 

 

(1)

 

Core income excluded extraordinary items, nonrecurring items, gains/losses on sale of securities, and amortization of intangibles as calculated by S&P Global Market Intelligence.

 

(2)

 

Excluded gains/losses on sale of securities per S&P Global Market Intelligence.

 

(3)

 

Excluded non-core permanent net tax benefit.

KBW’s analysis also showed the following concerning the financial condition of IBKC, First Horizon and the selected companies:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IBKC

 

First
Horizon

 

Selected Companies

 

Bottom
Quartile

 

Median

 

Average

 

Top
Quartile

Tangible Common Equity / Tangible Assets (%)

 

 

 

9.05

 

 

 

 

7.20

 

 

 

 

8.61

 

 

 

 

8.82

 

 

 

 

9.68

 

 

 

 

9.49

 

Common Equity Tier 1 Ratio (%)

 

 

 

10.41

 

 

 

 

8.99

 

 

 

 

9.60

 

 

 

 

11.80

 

 

 

 

11.60

 

 

 

 

12.35

 

Total Capital Ratio (%)

 

 

 

12.34

 

 

 

 

10.99

 

 

 

 

12.53

 

 

 

 

13.10

 

 

 

 

13.55

 

 

 

 

14.63

 

Loans / Deposits (%)

 

 

 

94.8

 

 

 

 

97.9

 

 

 

 

81.7

 

 

 

 

90.2

 

 

 

 

84.7

 

 

 

 

96.2

 

Loan Loss Reserve / Gross Loans (%)

 

 

 

0.61

 

 

 

 

0.61

 

 

 

 

0.61

 

 

 

 

0.71

 

 

 

 

0.72