A Buckeye state banking giant is entering Atlanta in a big way.

According to a source close to the deal, Fifth Third Bancorp. (NASDAQ: FITB) will buy substantially all of First Horizon National Corp.'s (NYSE: FHN) Georgia banking operations, the Business Chronicle has learned.

Under the terms of the deal, expected to be announced early Sept. 25, Fifth Third will buy 10 of First Horizon's 12 local branches. The deal is expected to close by the end of March 2008.

The deal includes all of First Horizon's local loans, deposits, its pending lease as the bank tenant at Buckhead's 50-story Sovereign office tower, and options to negotiate with all local First Horizon employees to retain them for future operations.

The sale is both the entry of another large, regional bank -- Fifth-Third is the nation's 13th largest bank with $101 billion in assets -- and the exit of a similar institution.

First Horizon, the national name for First Tennessee Bank, entered Atlanta in 2005 as part of the bank's aggressive, national expansion plan outside the Tennessee market, which it dominated.

Locally, that expansion began with a flurry of big name executive hires. It followed up over the next two years by pouring money into local branch expansion and prominent marketing campaigns, including becoming the lead

sponsor for Philips Arena's exclusive Club Level, replacing Bank of America (NYSE: BAC).

But First Horizon executives abruptly decided to end the experiment earlier this year, announcing it would sell, or shut down, all of its operations outside Tennessee by the end of 2007.

In Atlanta, that included a dozen branches -- a community bank is buying two non-metro First Horizon branches in Dallas and Douglasville -- staff, loans and deposits.

The timing appears to have been right for Fifth-Third. Based in Cincinnati, Fifth Third has traditionally operated in Midwest bank markets. In recent years, it has increasingly expanded in the Southeast.

This summer, the bank announced the buyout of Charlotte, N.C.-based First Charter, a $5 billion bank with operations in the Carolinas and two Georgia branches in Atlanta's suburbs, and the unrelated purchase of Augusta branches from R-G Crown Bank.

This latest buyout provides Fifth Third with significant operations in Atlanta, and fills out an operating footprint that had previously skipped Georgia entirely for Tennessee, the Carolinas and Florida.

First Horizon's fire sale, analysts said at the time of the announcement, was motivated in part by Fifth-Third's recent expansion and competition in Nashville, Tenn., one of First Horizon's core cities.