GSA Daily Staff Report
Published July 23, 2010

The Federal Reserve Board on Thursday approved TD Bank Financial Group’s application to acquire The South Financial Group based in Greenville.

The acquisition still requires approval from South Financial shareholders. South Financial expects the acquisition to close in September.

TD Bank Financial Group announced in May that it agreed to purchase South Financial for about $192 million and expected to cover about $1 billion in future losses on the South Financial portfolio.

Under the agreement, South Financial shareholders would receive $61 million in cash or TD common stock. Additionally, TD would pay $130.6 million to the United States Department of the Treasury for the $347 million in preferred shares the government acquired as part of the TARP program.

In its order approving the acquisition, the Reserve Board noted that South Financial and its Carolina First Bank are under financial stress and operating under formal supervisory actions from the Federal Reserve Bank of Richmond and the Federal Deposit Insurance Corp. The company operates Carolina First Bank throughout South Carolina and North Carolina and Mercantile Bank in Florida.

“Consummation of this proposal would create a combined organization that would serve as a strong provider of banking and other financial services in the markets served by Carolina First,” the Reserve Board stated in approving the acquisition on Thursday.

Read the full order here.

If the South Financial acquisition is finalized, TD Bank would become the 17th largest depository organization in the United States, with total consolidated assets of approximately $167 billion, according to the Federal Reserve.

Previous coverage
TD Bank aims to be among Top 3 in S.C.
South Financial Group needed $800 million to stay independent
South Financial merges with Canadian bank