Ted Evanoff

USA TODAY NETWORK – Tennessee

First Horizon National Corp. will buy Capital Bank Financial Corp. of Charlotte.

Memphis-based First Horizon, owner of First Tennessee Bank, announced a definitive agreement for the $2.2 billion deal on Thursday.

First Horizon will offer 1.75 shares and $7.90 in cash for each Capital Bank share — a ratio of 80 percent stock and 20 percent cash. Capital Bank shareholders will own 29 percent of First Horizon stock after the deal closes.

Capital Bank includes $10 billion in loans and other assets and operates nearly 200 branch offices in North Carolina, South Carolina, Tennessee, Florida and Virginia.

Capital Bank offices in Tennessee will be renamed First Tennessee and in other states keep the name Capital.

The deal would increase the asset size of First Horizon to about $40 billion, making it the No. 4 bank based in the Southeast.

First Horizon expects the deal would close in the fourth quarter at the earliest. Each bank's board has approved the merger. The transaction requires the approval of shareholders and bank regulators.

According to the newspaper Charlotte Observer, Capital Bank bought CommunityOne Bancorp of Charlotte to expand its presence in the city, although the bank "has developed bigger presences in places such as Miami, Raleigh and Nashville" than in Charlotte.

Capital Bank has expanded in part by buying failed banks. Former former Bank of America executives Gene Taylor and Chris Marshall formed the bank in 2009 and two years ago moved the head office to Charlotte from Coral Gables, Florida.

Two Capital Bank board members would join First Horizon's board, including Taylor, the chairmman. He'll become First Horizon vice chairman.

First Tennessee, the largest bank based in the state, operates branches throughout Tennessee and in Charleston, S.C.; Charlotte, N.C.; Houston; Jacksonville, Fla.; Raleigh, N.C.; Richmond, Va.; and Winston-Salem, N.C.

Barclays Capital Inc. and Morgan Stanley & Co. LLC advised First Horizon on the deal and Sullivan & Cromwell LLP served as legal advisor.