The nearly $4 billion deal to combine Lafayette-based IberiaBank with First Horizon Bank headquartered in Tennessee has been completed.
The 133-year-old IberiaBank is expected to change its name to First Horizon in mid-2021. No changes to general business operations, signs, accounts, ATMs, and debit and credit cards are expected until the 2021 conversion, the companies said.
The Tennessee bank already had a connection to Louisiana — while First Horizon CEO Bryan Jordan grew up in North Carolina, he was born in Alexandria.
The purchase of IberiaBank makes First Horizon one of the largest financial services companies across the South and among the top 25 banks in the U.S. when ranked by deposits at $60 billion, with 460 banking centers across 11 states. The combined entity has $79 billion in assets.
The deal was disclosed to the public in November 2019, months before the coronavirus pandemic and nationwide social justice protests threw the economic world into spin cycle. The most difficult part of the transition during such an uncertain era was the lack of in-person meetings during the integration of the two companies, the executive said.
"We knew that at some point the economy would go into a recession, but in November last year none of us could have expected it," Jordan said.
First Horizon's headquarters in Memphis will remain and the company will have a regional office in New Orleans. First Horizon also expects to keep IberiaBank's existing downtown Lafayette office since it owns the property.
IberiaBank's existing financial services arm in New Orleans has operated with several hundred workers and is expected to continue as an "important market."
The pandemic could influence future decisions about where to invest people and brick and mortar infrastructure as the public has shied away from bank lobbies or even handling cash.
"We are willing and able to invest in any and all markets to meet customer demand but we'll learn more in about six to 12 months. Customer behavior has clearly been impacted by the pandemic," he said. "I don't know if financial centers (branches) will be an important part as more people work remotely."
The CEO of IberiaBank, Daryl Bryd, becomes executive chairman of First Horizon for several years before he plans to step down and serve as a consultant, U.S. Securities and Exchange Commission filings show.
Under the terms of the agreement, IberiaBank shareholders will receive 4.584 shares of First Horizon for each IberiaBank share they own. About 56% of the combined company will be held by First Horizon shareholders and 44% by IberiaBank shareholders.
The new board of directors will have 17 members — nine from First Horizon and eight from IberiaBank, which was ranked as the largest bank headquartered in Louisiana.
The companies expect to save $170 million from combining operations.
The cost saving measures are expected across First Horizon, not just in IberiaBank's footprint. While there may be some corporate layoffs, the company expects to reduce employee count through individuals leaving or retiring. There are no plans for front-line bank worker layoffs, such as tellers.
"It will be spread across the franchise, most of the savings will be from leveraging buying power, consolidating real restate and there will be some impact on people and job elimination," Jordan said.
Most of First Horizon’s branch presence is in Tennessee, North Carolina and South Carolina. IberiaBank is primarily in Gulf Coast states from Texas to Florida and in Arkansas.
The merger culminates a period of growth for IberiaBank ushered in by Byrd, a former executive with former New Orleans-based First Commerce Corp. who joined IberiaBank in 1999.
Through about two dozen acquisitions, Byrd is often credited with steering the Lafayette bank from obscurity to a major regional player.
"With the incredible legacies of both organizations as our foundation, we plan to combine the best of both companies to position us for success in this rapidly evolving world," Byrd said of the merger with First Horizon.
IberiaBank had more than 3,100 employees as of September 2019; First Horizon has more than 5,500 employees.
There are 515 IberiaBank employees in New Orleans, 342 in Lafayette, 115 in Baton Rouge, 122 in New Iberia, 77 in Lake Charles, 45 in Monroe and 37 in Shreveport.
First Horizon also expects to continue charitable contributions in Louisiana, with plans for a new foundation for which $20 million is allocated.
IberiaBank has the largest share of the market in the Lafayette metro area, according to FDIC reports, along with 17 offices. As of June 2019, it had just under 33% of all deposits in the area, three times the market share of Chase Bank, which was second-highest. It has the fifth-highest percent of the market in both the Baton Rouge and New Orleans markets, FDIC data shows.
First Horizon has said it plans to invest in high growth markets such as New Orleans; Nashville and Knoxville, Tennessee; Miami, Orlando and Tampa, Florida; Houston and Dallas; Atlanta; and Charlotte and Raleigh, North Carolina.