Toronto-Dominion (TD) Bank and First Horizon Bank have agreed to terminate their $13.4 billion merger agreement announced in February 2022. TD cited uncertainty as to when and if it would be able to obtain regulatory approval and had nothing to do with Tennessee-based First Horizon.

As part of the termination agreement, TD will pay $200 million to First Horizon, on top of a $25 million reimbursement fee.

The merger would have made TD the sixth-largest bank in the US by assets. The transaction hit a snag in February when the bank warned First Horizon that it might not be able to gain regulatory approval by the extended deadline of May 27.

The deal ran into more trouble after the collapse of Silicon Valley Bank sent tremors through the financial system, in which TD already had a significant footprint, including a 12% stake in The Charles Schwab Corp.

The shares of First Horizon Series G Preferred Stock that TD purchased will continue to reflect a conversion price of $25 per share.

“Though disappointed with the outcome, we move forward with a strong, growing franchise in the United States, servicing more than 10 million customers across our footprint,” said TD chief executive Bharat Masrani.

First Horizon CEO Bryan Jordan called the termination “unfortunate and unexpected,” adding that the bank “will continue on its growth path operating from a position of strength and stability.”

First Horizon shares fell over 50% in pre-market hours after the merger with TD was canceled while TD shares popped 2%.