TD, First Horizon again extend deadline for closing merger

TD Bank Group and First Horizon Corp., facing heightened regulatory scrutiny and pressure from community groups, have again extended the targeted deadline to close their pending merger.

The two banks said late Thursday that they are moving the date from Feb. 27 to May 27. When the cash deal was announced nearly a year ago, the banks expected to close the deal in the fall of 2022.

Toronto-based TD had signaled on its most recent earnings call that an extended timeframe into the spring was likely; the announcement Thursday made it official.

TD and Memphis, Tennessee-based First Horizon said in a press release that they "are fully committed to the merger and continue to make significant progress in planning for the closing and the integration of the companies."

The companies noted that First Horizon's shareholders have voted to approve the transaction, and they said that "progress is being made on a Community Benefits Plan in support of local communities across the TD and First Horizon footprints" in the United States. The acquisition would create a top-six U.S. bank by assets.

The deal was originally valued at $13.4 billion. When a November 2022 deadline passed, the price tag increased by 65 cents per share.

For roughly the past 18 months, large U.S. bank deals have faced more hurdles. President Biden called on regulators to ramp up the intensity of merger-and-acquisition audits, while community groups have increasingly demanded promises by acquirers to remain committed to less affluent areas.

TD's U.S. subsidiary, TD Bank, has been facing pressure from community groups to invest more in local communities. The Canadian-owned bank said last year it would open 15 new branches in Charlotte, North Carolina, including at least three in underserved areas, by 2025.

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TD also has publicly discussed more expansion in the Southeast broadly. The First Horizon deal would give it a much deeper presence in the fast-growing region.

In addition, TD has faced pushback in Washington, D.C., over its past supervisory deficiencies. The Consumer Financial Protection Bureau dinged the bank in connection with overdraft fees, for example, leading to a $122 million settlement in 2020.

Since then, TD has announced several changes to its overdraft program. Those revisions include raising the threshold for when an overdraft applies, decreasing the number of times that a consumer can incur an overdraft fee in a single day and launching a no-overdraft account.