First Horizon and TD Bank have called off a $13 billion deal that would have formed America’s sixth-largest bank, adding to the turmoil sweeping the country’s regional lenders.

Caught up in the worst banking crisis since 2008, First Horizon (FHN)’s share price has plunged about 40% over the past couple months, falling well below the $25 per share that TD offered when the takeover was announced in February 2022. The stock closed at $15.05 a share Wednesday and plunged another 36% Thursday after the deal was mutually abandoned by the banks.

According to CNN, First Horizon is a regional lender in the southeast United States and would have helped Canada’s TD expand south of the border. But regional banks have been losing the confidence of investors and customers since the March collapse of Silicon Valley Bank and Signature Bank.

On Monday, a third regional bank, First Republic, failed and JPMorgan purchased most of its assets. A fourth, PacWest Bank confirmed earlier Thursday that it’s looking for a financial lifeline.

First Horizon said it remains stable, cash-rich and diversified. “While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability,” said First Horizon CEO Bryan Jordan, in a statement.

TD said in a statement that the companies called off the merger because of an unexpectedly long regulatory approval process. Without a timetable for approval, the companies began to question whether the deal would get regulators’ blessing at all. TD said the regulatory issue was for “reasons unrelated to First Horizon.”

In an interview with CNBC, Jordan concurred that he doesn’t believe the deal was called off because TD Bank wanted to avoid buying First Horizon as regional bank stocks plunge.

“We were unable to get a timeline for approval and we reached this agreement,” Jordan said. “We never assumed the regulatory approval was a given. We always knew that there was a risk in this process.”

He added that he believes that the banking sector remains strong, and that First Horizon has not taken considerable shifts to tighten its lending standards.

“I think things will stabilize, it’s just going to take some time,” Jordan said. “At the same time, we are seeing around the margins that contraction is occurring, just because of the tightness of financial conditions.”