Academic journal article Federal Reserve Bulletin

The Toronto-Dominion Bank Toronto, Canada: Order Approving the Acquisition of a Bank Holding Company

Academic journal article Federal Reserve Bulletin

The Toronto-Dominion Bank Toronto, Canada: Order Approving the Acquisition of a Bank Holding Company

Article excerpt

The Toronto-Dominion Bank ("TD") and its subsidiary bank holding companies, TD US P & C Holdings ULC ("TD ULC"), Calgary, Canada, and TD Bank US Holding Company ("TD Bank US HC"), Portland, Maine (collectively, "Applicants"), have requested the Board's approval under section 3 of the Bank Holding Company Act ("BHC Act") (1) to acquire The South Financial Group, Inc. ("TSFG") and its subsidiary bank, Carolina First Bank ("Carolina First"), both of Greenville, South Carolina. (2) Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (75 Federal Register 30,406 (2010)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in the BHC Act.

TD, with total consolidated assets equivalent to $568 billion, is the second largest depository organization in Canada. (3) TD operates a branch in New York City and an agency in Houston. Through TD Bank US HC, TD controls two subsidiary banks in the United States, TD Bank and TD Bank USA, National Association ("TD Bank USA"), Portland, Maine. TD Bank US HC, with total consolidated assets of $155 billion, is the 18th largest depository organization in the United States, controlling $125 billion in deposits. (4) Its subsidiary banks operate in 12 states and the District of Columbia. (5) In Florida, the only state where a subsidiary depository institution of TD Bank US HC and TSFG both operate, TD Bank US HC is the 16th largest depository organization, controlling deposits of approximately $4.4 billion.

TSFG has total consolidated assets of approximately $12.4 billion, and its subsidiary bank operates in South Carolina, North Carolina, and Florida. TSFG is the 13th largest depository organization in South Carolina, controlling deposits of $5.5 billion. In Florida, TSFG is the 20th largest depository organization, controlling deposits of $3 billion.

On consummation of the proposal, TD Bank US HC would become the 17th largest depository organization in the United States, with total consolidated assets of approximately $167 billion. TD Bank US HC would control deposits of approximately $134.7 billion, which represent 1.7 percent of the total amount of deposits of insured depository institutions in the United States. (6) In Florida, TD Bank US HC would become the 11th largest depository organization, controlling deposits ofapproximately$7.4billion, which represent approximately 1.8 percent of deposits of insured depository institutions in the state.

INTERSTATE ANALYSIS

Section 3(d) of the BHC Act allows the Board to approve an application by a bank holding company to acquire control of a bank located in a state other than the bank holding company's home state if certain conditions are met. For purposes of the BHC Act, the home state of TD is New York, (7) and TSFG is located in South Carolina, North Carolina, and Florida. (8)

Based on a review of all the facts of record, including relevant state statutes, the Board finds that the conditions for an interstate acquisition enumerated in section 3(d) of the BHC Act are met in this case. (9) In light of all the facts of record, the Board is permitted to approve the proposal under section 3(d) of the BHC Act.

COMPETITIVE CONSIDERATIONS

The BHC Act prohibits the Board from approving a proposal that would result in a monopoly or would be in furtherance of any attempt to monopolize the business of banking in any relevant banking market. The BHC Act also prohibits the Board from approving a bank acquisition that would substantially lessen competition in any relevant banking market, unless the anticompetitive effects of the proposal are clearly outweighed in the public interest by its probable effect in meeting the convenience and needs of the community to be served. (10)

Applicants and TSFG have subsidiary insured depository institutions that compete directly in five banking markets in Florida: Miami-Fort Lauderdale, Orlando, Palatka, St. …

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