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First Horizon-Capital Bank to Jointly Divest Two Branches

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After receiving regulatory approval from the Board of Governors of the Federal Reserve for a merger in October, Tennessee-based First Horizon National Corporation (FHN - Free Report) and Charlotte, NC-based Capital Bank Financial Corp. have agreed to sell two branches of Capital Bank in Greene County to Apex Bank.

Notably, First Horizon entered into a $2.2-billion stock-cash deal to acquire Capital Bank in May 2017. The combined entity will form the fourth-largest regional bank in the Southeast.

Terms of the Deal

Tennessee-based Apex Bank will absorb deposits worth approximately $34 million and $2.5 million in loans from the two branches. The branches were already included in First Horizon’s agreement with the United States Department of Justice and the Board of Governors of the Federal Reserve System. Notably, the agreement was signed during the customary review of the pending merger between First Horizon and Capital Bank Financial.

Apex Bank will retain all existing branch employees after acquiring the two branches. The company has assets worth $517 million and 11 branches.

Notably, the spin-off deal awaits closing of the First Horizon and Capital Bank merger, certain customary regulatory approvals to Apex Bank along with customary closing conditions.

Barclays Capital Inc., a unit of Barclays PLC (BCS - Free Report) , acted as financial advisors for First Horizon.

Bottom Line

First Horizon’s repositioning and restructuring efforts, which are still underway, will help reallocate the capital into the core markets. Also, its focus on cost control and efforts to boost long-term profitability are expected to augur well.

Notably, the company's shares have rose nearly 6.8% in the last six months as compared with the 4.7% rally of the industry.



Currently, First Horizon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock includes JMP Group LLC , which has been witnessing upward estimate revisions in the last 30 days. The company’s shares have rallied 3.3% in six months’ time. It carries a Zacks Rank of 2 (Buy).

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