Tennessee-based First Horizon National has agreed to acquire North Carolina-based Capital Bank Financial in a deal worth $2.2bn.

The combined group will manage $40bn in assets, $32bn in deposits, $27bn in loans and have more than 300 branches in Tennessee, North Carolina, South Carolina, Florida, Mississippi, Georgia, Texas and Virginia.

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Under the terms of the deal, Capital Bank stockholders will receive 1.750 shares and $7.90 in cash for each Capital Bank share. Capital Bank shareholders will receive about 80% stock and 20% cash in aggregate and will hold a 29% stake in First Horizon following the completion of the deal.

Two members of the board of directors at Capital Bank will join the First Horizon board as part of the deal. This includes Capital Bank chairman and CEO Gene Taylor, who will now hold the role of vice chairman at First Horizon.

The deal has received the approval from the boards of both companies. The deal is expected to be completed in the fourth quarter of 2017, subject to regulatory and shareholder approvals.

First Horizon chairman and CEO Bryan Jordan said: “Together with the accomplished team at Capital Bank we will be able to leverage the strengths of both banks and capitalize on growth opportunities in attractive, high-growth Southeast markets and enhance our strong presence in our Tennessee markets.

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“This partnership will help us more quickly achieve our critical bonefish financial targets. We look forward to working with the talented people of Capital Bank to combine the best of both of our organizations.”