TD Bank First Horizon Merger Update and Its Impact

TD Bank and First Horizon have announced a merger, marking a significant move in the banking industry. The deal is expected to close in the fourth quarter of 2022.

The combined entity will have over $459 billion in assets, making it one of the largest banks in the US. This merger will create a banking powerhouse with a strong presence in the Southeast.

The merger will bring together two banks with a long history of serving their customers. TD Bank was founded in 1857, while First Horizon was established in 1864.

As part of the merger, First Horizon's customers will gain access to TD Bank's extensive network of branches and ATMs across the US.

TD Bank recently terminated its planned acquisition of First Horizon Corp after it couldn't secure regulatory approval. The acquisition was worth $13 billion.

This decision was made after TD Bank announced the acquisition in February 2022 and extended its merger agreement deadline until May.

The merger between TD Bank and First Horizon was called off.

TD Bank recently terminated its planned acquisition of First Horizon Corp. The decision was made after it became clear that regulatory approval from the Federal Reserve was unlikely.

The acquisition was valued at $13 billion and was announced in February 2022.

The decision to call off the merger was mutual, according to the institutions involved.

TD Bank has a significant amount of excess capital, with a CET1 ratio of 12% and roughly $19 billion of excess capital over its internal target.

This excess capital gives the bank protection in a more uncertain environment and could allow it to return a lot of capital to shareholders once conditions stabilize, potentially later this year.

TD plans to buy back roughly 1.6% of its common shares outstanding, but this announcement didn't seem to excite the market too much.

The bank's Chief Executive Officer, Bharat Masrani, said the bank would complete this repurchase and then reassess the capital return plans during the summer.

Not purchasing First Horizon could also save TD a lot of capital, as the acquisition was initially planned to be bought for $25 per share, but now trades below $11 per share.

This is a significant difference, making it hard to justify paying such a huge premium over the current share price in a very different environment for the sector.

TD is still able to invest in growth, with plans to increase new branch openings by 50% and double its hiring of wealth advisors in the U.S.

The bank is also hiring more frontline and specialist advisors in Canada and increasing its investment in digital and mobile capabilities.

This gives TD a war chest it could potentially use to make a big acquisition at some point, possibly at a better price, too.

First Horizon's share prices plummeted in the immediate aftermath of the announcement, dropping more than 40% in pre-market trading.

Stock prices hit a 52-week low of 8.99 a share, which is significantly lower than the $25-per-share deal price put forward in the merger agreement.

TD Bank saw a slight drop in share prices when the markets opened, with prices starting at $60.75 and dropping to $59.60 about an hour later.

This remains several points above the 52-week low of $55.43.

TD Bank is expanding its presence in the Southeast U.S. with a significant acquisition.

The acquisition of First Horizon will give TD Bank a major foothold in the region, with operations in Tennessee, Arkansas, Mississippi, and Alabama.

TD Bank will gain over 200 branches and 300 ATMs through the acquisition.

This expansion will provide customers with increased access to banking services, including personal and commercial banking, mortgages, and investments.

With First Horizon, TD Bank will now have a stronger presence in the Southeast, allowing it to better serve its customers in the region.

The acquisition is expected to be completed in the second half of 2023, pending regulatory approval.