Tag: First Horizon

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First Horizon, TD Bank Merger Deal Off

(Photo: Samuel X. Cicci)

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.

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News Blog

First Horizon to be Acquired by TD Bank Group

First Horizon president and CEO Bryan Jordan (Credit; First Horizon Corporation)

One of the region’s biggest financial institutions is about to be under new leadership. Earlier today, First Horizon Corporation announced that it is set to be acquired by Toronto-Dominion Bank and its subsidiaries (TD Bank Group). The all-cash transaction is valued at US $13.4 billion.

“First Horizon is a great bank and a terrific strategic fit for TD. It provides TD with immediate presence and scale in highly attractive adjacent markets in the U.S. with significant opportunity for future growth across the Southeast,” said Bharat Masrani, group president and CEO of TD. “Working with the First Horizon team, TD will build upon the success of its strong franchise and deliver the legendary customer experiences that differentiate us in every market across our footprint.”

As of December 31, 2021, First Horizon boasted 412 branches across 12 states and assets totaling $89.1 billion. Meanwhile, TD is the fifth largest bank in North America and serves more than 26 million customers. As of October 31, 2021, TD reported overall CDN$1.7 trillion in assets.

The transaction will turn TD into a top 6 U.S. bank, with about $614 billion in assets and a network of 1,560 stores across 22 states. According to TD, there are no plans to shut down any First Horizon branches in connection to the transaction. Upon closing, TD will also make a $40 million donation to the First Horizon Foundation.

First Horizon president and CEO Bryan Jordan will join TD as vice chair, TD Bank Group.

“We have built a very strong business at First Horizon, and by joining forces with TD, we will create extraordinary value for our key stakeholders with a shared customer-centric strategy, enhanced scale and a broader product set for our clients. This is a true growth story,” said Jordan. “We have long respected TD as a leader in U.S. banking and are confident that its continued and growing investments in our local markets will extend our long history of community support. Thank you to our First Horizon associates for their efforts and dedication to our clients and communities as we continue to deliver for them every day. We look forward to successfully completing this transaction and are excited to join TD.”

The deal is expected to close in the first quarter of TD’s 2023 fiscal year.

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Memphis Gaydar News

Report Scores Memphis Businesses on LGBTQ Equality

Credit: Memphis Pride Fest

Memphis Pride Fest

The Human Rights Campaign’s (HRC) annual Corporate Equality Index included four of Memphis’ biggest companies and a law firm. Two of the corporations scored towards the top, with one scoring in the middle and another toward the bottom.

The HRC claims it is “the nation’s largest LGBTQ civil rights organization.” Its report reviewed 1,059 companies and law firms this year. That included 25 Tennessee-based businesses. In Memphis, five companies were deemed large enough for review by the Human Rights Campaign.

Of those here, the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz PC scored the highest with 90 out of 100 points possible. FedEx Corp. scored high, too, with an overall equality score of 85. First Horizon National Corp. also scored near the top with 75 total points.

AutoZone Inc. scored near the middle with 40 total points. International Paper had the lowest Memphis score on the report with 30 total points.

All of these points were awarded to companies based on four broad criteria:

• Non-discrimination policies

• Employment benefits

• Supporting an inclusive culture and corporate social responsibility including public commitment to LGBTQ equality

• Responsible citizenship

”These companies know that protecting their LGBTQ employees and customers from discrimination is not just the right thing to do — it is also the best business decision,” HRC president Alphonso David said in a statement. “In addition, many of these leaders are also advocating for the LGBTQ community and equality under the law in the public square.”
[pullquote-1] HRC began its report in 2002, done largely through a survey of Fortune magazine’s 500 largest publicly traded businesses, American Lawyer magazine’s top 200 revenue-grossing law firms and hundreds of publicly and privately held mid- to large-sized businesses.

In its first year, HRC named 13 top-rated companies. This year, the group named 686 such businesses that had a perfect 100 score ”under the most stringent criteria to date.”

This year, 13 to the Fortune 500’s top 20 companies earned perfect HRC scores.

Human Rights Campaign

Here are some more insights gleaned in this year’s Corporate Equality Index (CEI):

• The more than 680 companies that earned a 100 on the CEI represent 12.4 million employees nationally, 11.9 million globally, and earn a combined estimate of $12.9 trillion in revenue.

• Eighty-three companies participated in the CEI for the first time in 2020, with 36 debuting at a score of 100, including Etsy Inc., Peloton Interactive Inc., Stop & Shop, and Warner Music Group.

• Of all Fortune 500 companies, 93 percent have sexual orientation in their U.S. non-discrimination policy, and 91 percent have gender identity.

• The average CEI score for all Fortune 500 companies increased from 67 to 71 in the past year — with actively participating Fortune 500 companies having an average score of 90, up from 88 last year.

• Tennessee companies averaged a score of 70 in this year’s CEI.

• This year 89 percent of companies participating in the CEI offer at least one health-care policy that is inclusive of their transgender workers.

Read the full report here:
[pdf-1]

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Memphis Gaydar News

Memphis Law Firm Gets Perfect Score in Equality Index, AutoZone Scores Low

A Memphis law firm, FedEx, and First Horizon scored well in this year’s Human Rights Campaign (HRC) Corporate Equality Index, while International Paper and AutoZone fell toward the bottom of the list.

Baker, Donelson, Bearman, Caldwell & Berkowitz PC scored a perfect 100, making it one of only two major corporations and/or law firms in Tennessee with a perfect score. The other was Nissan North America Inc. in Franklin.

That means the company prohibits discrimination based on sexual orientation or gender identity, has vendor/contractor standards that don’t discriminate based on sexual orientation or gender identity, offers partner health insurance, has other “soft” benefits for partners, offers transgender-inclusive health coverage, has organizational competency programs, has a firm-wide diversity council or LGBT employee group, and positively engages the external LGBT community.

FedEx scored high with an 85 percent. The main thing that kept FedEx from scoring higher was its lack of transgender-inclusive healthcare coverage. First Horizon Corp. also scored an 85 percent. 

International Paper scored a 25 percent, and AutoZone scored a 10 percent. The only LGBT-friendly policy at AutoZone is one prohibiting discrimination based on sexual orientation.

In total, 851 companies across the country were officially rated in the 2016 index, up from 781 in the 2015 report. The average score for companies and law firms based in Tennessee is 69 percent. Of the 12 Tennessee companies ranked, two earned 100 percent, and four earned 80 percent or above.

“Corporate America has long been a leader on LGBT equality, from advocating for marriage equality to expanding essential benefits to transgender employees,” said HRC President Chad Griffin. “But this year, many leading U.S. companies have broken new ground by expanding explicit non-discrimination protections to their LGBT workers around the globe. They’ve shown the world that LGBT equality isn’t an issue that stops at our own borders, but extends internationally.”

To see the full index, go here.

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Memphis Gaydar News

FedEx Scores High, AutoZone Scores Low on Equality Index

The Human Rights Campaign’s 2015 Corporate Equality Index (CEI) assessed LGBT inclusion in a number of major companies and law firms in Memphis. 

The CEI ranks companies on a scale of 1 (worst) to 100 (best) based on non-discrimination policies, employment benefits, demonstrated organizational competency and accountability around LGBT diversity and inclusion, public commitment to LGBT equality, and responsible citizenship.

Memphis-based FedEx Corp. and local law firm Baker, Donelson, Bearman, Caldwell & Berkowitz tied with for high scores of 85, while AutoZone Corp. received a low score of 15.

FedEx’s non-discrimination policy covers sexual orientation and gender identity. They offer domestic partner benefits, and their insurance covers transgender health benefits, such as hormone therapy and short-term leave after surgical procedures. They have an LGBT employee group, and they actively market to LGBT consumers.

AutoZone does have a non-discrimination policy regarding sexual orientation, but gender identity is not covered. The company also fails to offer domestic partner benefits, and it lacks an LGBT employee group.

Other Memphis companies on the list scored as follows: First Horizon National Corp. (75), Unum Group (60), and International Paper (45).

Nationally, a record 366 businesses scored perfect 100s. The only Tennessee company to score a 100 was Nissan North America, Inc. in Smyrna. 

“When it comes to LGBT equality, Corporate America is a leader, not a follower,” said HRC President Chad Griffin. “At every turn, from advocating for marriage equality to providing vital support for transgender employees, this country’s leading companies have asked, ‘what more can we do?,’ and they’ve worked tirelessly to achieve new progress. That kind of leadership changes countless lives around this country, and sets an important example to other companies around the globe.”

            

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Opinion

Memphis Cracks Global Top 17 in Financial Shenanigans

Jerry Baker

  • Jerry Baker

We may not have a pro or BCS-league football team, but when it comes to financial shenanigans Memphis is in the big time, at least in the eyes of federal regulators.

For the second time in a year, a Memphis financial firm has earned national attention if not a national rating for its prowess in the once wildly popular mortgage-backed securities industry. First it was Morgan Keegan, which settled with the Securities Exchange Commission for $200 million. Now First Horizon has been named a world-class miscreant by the federal housing regulator known to none-and-all as the Federal Housing Finance Agency (FHFA).

Eat your hearts out, Nashville and St. Louis. In a front-page story in the Wall Street Journal Saturday, Memphis-based First Horizon is among the chosen in lawsuits against “17 of the world’s biggest financial institutions.” Also on the elite list are Bank of America (assets of $2.5 trillion), Citigroup ($1.9 trillion in assets), Goldman Sachs, and J.P. Morgan Chase & Co. First Horizon is the plucky underdog in the group, with just $25 billion in assets.

Why anyone would take a bank’s asset valuation seriously these days is one for Ripleys. Investors apparently don’t. First Horizon’s stock value peaked at $40 a share in 2007 and has fallen to about $6 a share. And if you don’t understand banking and collateralized debt obligations, don’t worry. Regulators and Fannie Mae and Freddie Mac apparently don’t either, or at least the lawsuit says they didn’t figure it out for years until it was too late.

The charge: First Horizon and its subsidiaries were on an expansion kick in 2005-2007 and packaged mortgages into sellable securities without divulging the crummy credit quality of some of them. Not unlike the rap against Morgan Keegan and its so-called Kelsoe funds.

“Defendants falsely represented that the underlying mortgage loans complied with certain underwriting guidelines and standards, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans,” says the FHNA lawsuit.

“The Registration Statement contained statements about the characteristics and credit quality of the mortgage loans underlying the Securitizations, the creditworthiness of the borrowers of those underlying mortgage loans, and the origination and underwriting practices used to make and approve the loans. Such statements were material to a reasonable investor’s decision to invest in mortgage-backed securities by purchasing the Certificates. Unbeknownst to
Fannie Mae and Freddie Mac, these statements were materially false.”

Named in the lawsuit are Gerald ‘Jerry’ Baker, CEO of First Horizon from 2007-2008 when he retired after a quarter in which the company lost $19 million, and Charles Burkett, who retired in June 2011 as president of banking at First Tennessee.

First Horizon, once known as First Tennessee, has had a succession of leaders since Ron Terry was CEO from 1973-1995. They include Ralph Horn, 1994-2002; Ken Glass, 2003-2007, Baker from 2007-2008; and Bryan Jordan, 2008-present. It is the last home grown “Big Three” Memphis bank since Union Planters and National Bank of Commerce were acquired by other companies.

The 77-page lawsuit is dense but includes some interesting details suitable for Labor Day weekend reading.