First Tennessee Bank To Expand In North Carolina With Acquisition Of TrustAtlantic

First Tennessee Bank, which has one of the highest customer retention rates of any bank in the country and the number one combined market share in its Tennessee markets, is expanding its decade-long presence in North Carolina. First Horizon National Corp. FHN, First Tennessee's parent company, has agreed to acquire Raleigh, N.C.-based TrustAtlantic Financial Corp. subject to approval by regulators and TrustAtlantic's shareholders. TrustAtlantic Financial and its subsidiary, TrustAtlantic Bank, have grown to approximately $453 million in total assets and $395 million in total deposits as of Sept. 30 since it began operations in June 2007 by acquiring and substantially recapitalizing a $32 million bank in Greenville, N.C., and moving the headquarters to Raleigh. TrustAtlantic Bank serves its customers through four full-service banking offices in the Raleigh-Cary metro area and one in Greenville, N.C., and all will operate as First Tennessee branches after the acquisition is completed. First Tennessee has offered commercial banking, commercial real estate, private client and wealth management products and services in Raleigh and other North Carolina markets for 10 years. "The vibrant communities in North Carolina and the attractive relationships TrustAtlantic has developed make this an exciting partnership for First Tennessee and First Horizon," said Bryan Jordan, First Horizon's chairman and CEO. "This acquisition provides an important expansion in the state's Research Triangle region, one of the most attractive markets in the Southeast. The combination of the highly experienced bankers at TrustAtlantic and First Tennessee will result in a truly powerful banking team. We look forward to working with the customers and employees of TrustAtlantic to continue earning business in North Carolina." "This announcement is the culmination of a thorough and thoughtful process over many months by our board of directors to identify the strategic partner that would best meet the needs of our shareholders, customers, employees and communities we serve," said Jim Beck, president and CEO of TrustAtlantic Financial. "We believe combining with First Horizon and First Tennessee achieves that objective. Being part of First Tennessee will give our bankers vastly expanded capacity and a more sophisticated suite of products to better serve our existing customers and to attract new ones. Our employees will be part of a company that is nationally recognized as a great place to work. We are excited about what the future holds for our combined organizations." Beck will join the leadership team of First Tennessee's Mid-Atlantic region as Triangle market president, managing commercial banking and branch operations. Ken Reece, First Tennessee's current Raleigh market leader, will assume an expanded role managing private banking and wealth management in the region. "This is a wonderful combination of complementary business operations," said John Fox, president of First Tennessee's Mid-Atlantic region. "Both companies have done a fine job of serving customers in our business segments. Going forward, customers of our respective organizations will have access to a broader array of products and services provided by our talented bankers, one opportunity at a time." In the proposed transaction, TrustAtlantic shareholders may choose to receive First Horizon common stock, based on an exchange ratio of 1.4240 shares of First Horizon common stock for each TrustAtlantic share, subject to potential adjustments as provided in the merger agreement, or may elect to receive an equivalent value in cash based on a formula contained in the merger agreement. The stock and cash election is subject to 75 percent of the overall transaction consideration being in stock and 25 percent in cash. Based on First Horizon's 10-day volume-weighted average price of $11.94 on Oct. 15, the transaction is valued at $17.00 for each TrustAtlantic share. A slide presentation outlining details of the transaction will be available in the investor relations section of www.FirstHorizon.com. Subject to customary closing conditions, First Horizon expects to complete the acquisition of TrustAtlantic Financial in the first half of 2015 and later merge TrustAtlantic Bank into First Tennessee Bank. Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, served as legal counsel to First Horizon in this transaction. FIG Partners LLC served as financial advisor and Wyrick Robbins Yates & Ponton LLP served as legal counsel to TrustAtlantic.