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Acquisitions and Divestitures | 6 Months Ended
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Jun. 30, 2020
Business Combinations [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures On July 1, 2020, FHN and IBERIABANK Corporation ("IBKC") closed their merger-of-equals transaction. FHN issued approximately 242 million shares of FHN common stock, plus three new series of preferred stock (Series B, Series C, and Series D) in a transaction valued at $2.5 billion. At the time of closing, IBKC operated 319 offices in 12 states, mostly in the southern and southeastern U.S. In the merger: FHN acquired approximately $34.7 billion in assets, including approximately $26.1 billion in loans and $3.5 billion in AFS securities; and, FHN assumed approximately $28.3 billion of IBKC deposits. Due to the timing of the merger closing in relation to quarter end and the uncertainty of valuations in the current economic environment, FHN's assessment of the fair value of IBKC's assets and liabilities is incomplete. However, FHN currently expects to recognize a purchase accounting gain. Total merger expenses for the IBKC merger recognized for the three and six months ended June 30, 2020 are presented in the table below:
|  | June 30, 2020
(Dollars in thousands) |  | Three Months Ended |  | Six Months Ended
Professional fees (a) |  | $ | 3,748 |  |  | $ | 4,410 |
Employee compensation, incentives and benefits (b) |  | 4,705 |  |  | 5,394 |
Miscellaneous expense (c) |  | 1,003 |  |  | 1,257 |
Total IBKC acquisition expense |  | $ | 9,456 |  |  | $ | 11,061 |
(a) | Primarily comprised of fees for legal, accounting, and merger consultants.
(b) | Primarily comprised of fees for severance and retention.
(c) | Primarily comprised of fees for travel and entertainment, contract employment, and other miscellaneous expenses.
On July 17, 2020, First Horizon Bank completed its purchase of 30 branches from Truist Bank. As part of the transaction, FHN assumed approximately $2.2 billion of branch deposits for a 3.40 percent deposit premium and purchased approximately $423.7 million of branch loans. The branches are in communities in North Carolina (20 branches), Virginia (8 branches), and Georgia (2 branches). This transaction qualifies as a business combination. Due to the timing of the merger closing in relation to quarter end and the uncertainty of valuations in the current economic environment, FHN's assessment of the fair value of the acquired assets and liabilities is incomplete. See Note 2- Acquisitions and Divestitures in the Notes to Consolidated Financial Statements on Form 10-K for the year ended December 31, 2019, for additional information about FHN's other acquisitions. Expenses related to FHN's merger and integration activities are recorded in FHN's Corporate segment. Total other merger and integration expense recognized for the three and six months ended June 30, 2020 and 2019 are presented in the table below:
|  | Three Months Ended June 30 |  | Six Months Ended June 30
(Dollars in thousands) |  | 2020 |  | 2019 |  | 2020 |  | 2019
Professional fees (a) |  | $ | 1,327 |  |  | $ | 4,478 |  |  | $ | 2,126 |  |  | $ | 6,345 |
Employee compensation, incentives and benefits (b) |  | 87 |  |  | 1,472 |  |  | 483 |  |  | 2,989 |
Contract employment and outsourcing (c) |  | 420 |  |  | 17 |  |  | 726 |  |  | 17 |
Occupancy (d) |  | (82 | ) |  | 1,505 |  |  | (107 | ) |  | 1,623 |
Miscellaneous expense (e) |  | 503 |  |  | 79 |  |  | 1,325 |  |  | 1,148 |
All other expense (f) |  | 2,610 |  |  | 1,096 |  |  | 4,484 |  |  | 2,185 |
Total |  | $ | 4,865 |  |  | $ | 8,647 |  |  | $ | 9,037 |  |  | $ | 14,307 |
Certain previously reported amounts have been reclassified to agree with current presentation.
(a) | Primarily comprised of fees for legal, accounting, and merger consultants.
(b) | Primarily comprised of fees for severance and retention.
(c) | Primarily relates to fees for temporary assistance for merger and integration activities.
(d) | Primarily relates to expenses associated with lease exits.
(e) | Consists of fees for operations services, communications and courier, equipment rentals, depreciation and maintenance, supplies, travel and entertainment, computer software, and advertising and public relations.
(f) | Primarily relates to contract termination charges, internal technology development costs, costs of shareholder matters and asset impairments, as well as other miscellaneous expenses.
In addition to the transactions mentioned above, FHN acquires or divests assets from time to time in transactions that are considered business combinations or divestitures but are not material to FHN individually or in the aggregate. In April 2019, FHN sold a subsidiary acquired as part of the CBF merger in 2017 that did not fit within FHN's risk profile. The sale resulted in the removal of approximately $25 million UPB of subprime consumer loans from Loans held-for-sale on FHN's Consolidated Condensed Statements of Condition.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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