After a series of delays and continued uncertainty, First Horizon and TD Bank Group have mutually agreed to terminate their proposed $13.4 billion merger.

TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon, according to a news release issued Thursday that announced the merger had been called off. Because there is uncertainty as to when and if these approvals can be obtained, they agreed to terminate the 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 Bryan Jordan, First Horizon chairman, president and chief executive officer.

TD will make a $200 million cash payment to First Horizon under the terms of the termination agreement, according to the news release. This payment is in addition to the $25 million fee reimbursement due to First Horizon pursuant to the merger agreement.

"This decision provides our colleagues and shareholders with clarity. 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." said Bharat Masrani, group president and chief executive officer of TD Bank Group. "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."

First Horizon's stock closed at $15.05 on Wednesday and had fallen nearly 38% Thursday morning to $9.37. TD planned to pay $25 for each share of First Horizon when the deal was announced on Feb. 28. After that, First Horizon's stock price soared to $23.48.

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The history First Horizon-TD Bank proposed merger

Thursday’s announcement ends an ongoing saga that began with TD initially confirming plans to purchase Memphis-based First Horizon for $13.4 billion in February 2022. First Horizon has more than 7,500 employees throughout all its locations, according to its website.

"First Horizon is a strong, well-positioned company and a valued partner as we build a greater Memphis for all," said Ted Townsend, Greater Memphis Chamber president and CEO, in a statement. "The Chamber is grateful for First Horizon's leadership and partnership, and we will continue to support the company as it operates as one of the nation's leading financial institutions from its headquarters in Memphis."

If the deal had been finalized, TD’s U.S. franchise, based in Cherry Hill, New Jersey, would have become a top-six U.S. bank and significantly expanded its Southeast presence. TD planned to make Memphis a “regional” hub once the merger was completed.

First Horizon shareholders voted to approve the agreement in May 2022. TD initially had hoped to close the deal by the end of the company’s first half of the year by April 30. For a variety of reasons, that never came to fruition.

A group of federal lawmakers in June sent a letter to the U.S. Office of the Comptroller of the Currency, a federal bank regulator, asking them to block the $13.4 billion merger between Memphis-based First Horizon Corp. and TD Bank Group.

The lawmakers cited a report from Washington-based news outlet Capitol Forum regarding concerns about TD Bank Group’s “abusive practices," which reportedly included a “point system” by TD Bank that incentivized employees to open as many accounts and push as many customers into overdraft protection as possible.

TD called the allegations “unfounded” in a statement to The Commercial Appeal.

Regulatory approvals cited for delaying deal

TD informed First Horizon in March that it did not expect that the necessary regulatory approvals will be received in time to complete the merger. That was the first time in the process TD could not project a new closing date at this time.

That came after both parties in early February agreed to extend the outside date for closing a deal from Feb. 27 to May 27.

Masrani in January cited the regulatory approval process and ongoing discussions for the bank to complete a community benefits agreement as two reasons for the delay in acquiring First Horizon during the Canadian Bank CEO Conference in Toronto.

However, even after TD Bank announced a five-year, $50 billion Community Benefits Plan agreement developed in coordination with the National Community Reinvestment Coalition to benefit areas across TD Bank’s expanded presence once the merger is complete, that did not help the deal get over the line.

First Horizon once appeared certain to become the last of Memphis’ three big banks to be sold, but now its future remains uncertain.

"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,” Jordan said. “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."

Omer Yusuf covers the Ford project in Haywood County, residential real estate, tourism, and banking for The Commercial Appeal. He can be reached via email Omer.Yusuf@commercialappeal.com or followed on Twitter @OmerAYusuf.

This article originally appeared on Memphis Commercial Appeal: TD Bank, First Horizon call off merger: Here's why