Toronto-Dominion Bank’s planned US$13.4 billion purchase of First Horizon Corp. was held up as U.S. regulators scrutinized the Toronto lender’s handling of suspicious customer transactions — a delay which contributed to the banks’ decision to abandon the deal, according to a person familiar with the matter.

The regulators’ concerns were related to anti-money laundering practices, according to the person, who asked not to be identified discussing private information. The reluctance by the Office of the Comptroller of the Currency and the Federal Reserve to sign off on those practices ended up being the biggest obstacle, the Wall Street Journal reported earlier, citing people it didn’t identify.

“TD works diligently to prevent criminals from using the bank for illegal activity, to strengthen its risk management programs on an ongoing basis, and to protect the interests of our customers, the bank, and the financial system,” a spokesperson said by email. “Risk management has always been core to TD’s business, and we work collaboratively with our regulators on all such matters.”

Representatives for the OCC and the Fed declined to comment to Bloomberg News.

“We do want to be clear that TD’s decision to agree to a mutual termination of the merger agreement, as a result of the uncertainty in the timing of regulatory approval, is not in any way related to TD’s good faith dealings with our customers,” the TD spokesperson said.

Canada’s second-largest lender walked away from the deal for Memphis-based First Horizon last week, saying it was uncertain that it could get regulatory approval. It would have been Toronto-Dominion’s largest acquisition ever, adding more than 400 branches in the US Southeast to fill in a network that already stretches down most of the eastern seaboard.

With assistance from Katanga Johnson.