Ed Clark, TD Bank's chief executive officer.TODD KOROL
Toronto-Dominion Bank chief executive officer Ed Clark has secured what he has been striving for since the banking crisis first erupted: a U.S. government-assisted deal that will expand the bank's reach in key markets.
"We finally got one," Mr. Clark said in an interview Friday.
TD has struck a deal with the Federal Deposit Insurance Corp. that will give the Canadian bank 69 new locations in Florida, a market that TD has been craving expansion in.
TD is picking up $3.1-billion (U.S.) in deposits and $3.8-billion in assets, including $2.1-billion in loans, from three Florida banks: Riverside National Bank of Florida, First Federal Bank of North Florida, and AmericanFirst Bank. Each had been put into receivership by U.S. regulators.
TD is buying the assets at their face value, but the FDIC has agreed to pick up at least half of the losses if customers don't pay back their loans.
TD has long sought after an FDIC-assisted deal that would allow it to expand in the U.S. without taking on all of the risk that comes from buying troubled loan portfolios.
Last May, TD bid for BankUnited Financial Corp., a Florida lender that had about 80 branches, but TD's best offer was nearly $1-billion less than the next lowest offer, which came from a consortium led by billionaire investor Wilbur Ross.
Mr. Clark said TD has changed its bidding strategy in the wake of its losing offers for BankUnited and other beleaguered lenders.
"This is an example of learning by doing," he said. "We now have a team that knows exactly how to do this."
Mr. Clark said that this is the "perfect" platform in Florida, with a network of "great locations and beautiful branches." The FDIC first approached TD to see if it was interested in these assets about a month ago, and it learned that it had won two days ago.
The deal speeds up TD's growth strategy in Florida by five years, and comes with little risk, Mr. Clark said. It will have no material impact on the bank's earnings or capital levels, TD said.
Before the deal TD had about 30 branches in Florida, up from nine in 2007.
All told, TD's U.S. bank - recently named TD Bank, America's Most Convenient Bank - has more than $150-billion in assets and more than $70-billion in deposits. TD has placed a huge emphasis on U.S. growth, more so than any of its Canadian rivals, and now has as many locations in the U.S. as it does in Canada.