TD Bank announced Monday its plans to buy The South Financial Group for $61 million. South Financial, a large regional bank located in the Southeast, will add more than 100 branches to TD Bank’s 1,000-plus locations along the East coast.

“This transaction represents another key milestone as we continue to build out our U.S. franchise,” TD Bank president and CEO Ed Clark said. “With the acquisition of South Financial, we’re gaining established commercial banking assets and a solid network of stores in attractive and growing markets within our Maine-to-Florida footprint.”

South Financial a victim of downturn

South Financial, which owned 176 total locations and 66 in Florida, struggled mightily during the nation’s recent financial crisis.

The bank took on $1.3 billion in losses since the start of 2008, primarily on commercial and residential mortgages and residential and development lending in the Southeast. South Financial’s massive losses caused the Federal Deposit Insurance Corporation (FDIC) to declare the bank no longer “well capitalized.” The bank, which owns $9.8 billion of assets, is currently not allowed to declare or pay any dividends without FDIC approval.

“Our board and management have conducted a broad and extensive process over the last six months to seek the best outcome for our shareholders,” South Financial president and CEO H. Lynn Harton said. “TD is a strongly-capitalized financial institution with a prudent approach to risk management.”

A ‘relatively small’ transaction for TD

TD didn’t need to reach deep into its pockets to purchase South Financial. With $152 billion in assets and more than 1,000 locations, the $61 million price tag was not prohibitive.

“This is a relatively small acquisition and exactly the kind of unassisted transaction that we’ve said we’re comfortable doing,” Clark said. “All in all, we think we’re getting a strong franchise that offers a solid financial return.”

The deal also gives TD Bank small banks Carolina First Bank and Mercantile Bank, which were previously part of South Financial.

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  • Kae Gregory

    Are TSFG shareholders satisfied with getting 1/4 book in this transaction?

  • dan

    I wonder how much the board is getting in golden parachutes, TD stock, etc

  • Brad

    TSFG shareholders are disgruntled, disgusted and otherwise very much in opposition to this merger with TD Bank. The terms are abhorrent – 28 cents a share? This is almost criminal. The executive management and Board of Directors of The South Financial Group should be investigated for gross mismanagement. I will be quite surprised if the TD Bank transaction goes through once the shareholders proceed with a class action suit against TSFG.

  • shaun10

    Someone wants to buy your shares at $0.28 and steal your money and nothing you can do about it. In the name of financial reform they rub you bind. Make you work like dog and what you saved they steal. At the end of the day you have nothing. Welcome to Wall Street!!!

  • muse

    This deal is a conspiracy. FDIC and morgan stanley should be investigated. the price target for TSFG at 2.5 above per share(S&P). They sacrifice the common investor's profit. somebody gain benefits, it's unfair

  • paulson

    TD in the highest price of history exchange TSFG in the lowest price of history.
    It exists fraud action.

  • muse

    if giving it the correct value, the target price is $2 above,but if there is a illegal or unfair exchange, maybe the price is $0.03

  • muse

    if giving it the correct value, the target price is $2 above,but if there is a illegal or unfair exchange, maybe the price is $0.03

  • Rhpepper

    I think that a class action lawsuit against the previous board members and the current board for careless and wreckless actions on their behalf. I hear that M. Whittle got away with millions. I want a part of those millions! I've lost more than $400K since 2008. Talk about disgusted!! I have children just entering college and expected these investments to support where necessary.
    I have completely stopped investing in the stock market. All investments are cash now and FDIC insured.
    All the board members should be personally responsible for the collapse and should pay all they can to avoid JAIL!!