One of the region’s biggest financial institutions won’t have a new name after all. On Thursday, First Horizon Corporation and TD Bank Group announced they had mutually agreed to terminate their merger agreement.
“While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability,” said First Horizon chairman, president, and CEO Bryan Jordan in a statement. “Our strong capital position, disciplined credit quality, expense control measures, and well-diversified and stable funding mix have enabled our business to navigate challenging banking industry dynamics and remain focused on executing our client-centric growth plan. We continue to develop and expand deep client relationships across all of our markets, which include some of the fastest-growing U.S. markets, while maintaining a strong, asset-sensitive balance sheet well-positioned for the current rate environment.”
First Horizon had announced in February 2022 that it would be acquired by Toronto-Dominion Bank and its subsidiaries in an all-cash transaction valued at $13.4 billion. However, the acquisition had been delayed twice — to an ultimate May 27th deadline — due to pending regulatory approvals. With the deadline approaching, the companies were not confident about hitting that date, and TD could not provide a new projected timeline in which regulatory approvals might be obtained. Because of that uncertainty, the two companies decided to call off the merger. It would have made TD the sixth-largest bank in the United States, measured by assets.
“This decision provides our colleagues and shareholders with clarity,” said TD Bank Group president and CEO Bharat Masrani. “Though disappointed with the outcome, we move forward with a strong, growing franchise in the United States, servicing more than 10 million customers across our footprint. I want to thank First Horizon for their partnership over the last several months and wish them enormous success for the future. Above all, I want to thank our colleagues at TD Bank, America’s most convenient bank, for their tremendous efforts and steadfast dedication to the bank, the millions we serve and the communities in which we live and work.”
The termination agreement means that TD will make a $200 million cash payment to First Horizon (on top of a “$25 million fee reimbursement due to First Horizon pursuant to the merger agreement”).
First Horizon’s share price had dropped about 40 percent over the last few months, far below the $25 per share that TD had offered when the merger was announced. The stock closed at $15.05 on Wednesday and fell almost another 40 percent, currently sitting at $9.24.