Source: The Canadian Press

TD Bank (TSX:TD) announced Friday it has acquired three insolvent Florida banks that were seized by U.S. regulators, continuing its measured expansion south of the border as it seeks to be come a “truly North American” retail bank.

TD said late Friday it had bought the assets and liabilities of Riverside National Bank of Florida, First Federal Bank of North Florida and AmericanFirst Bank from the Federal Deposit Insurance Corp., effective immediately.

The price tag of the deals for the insolvent Florida banks was not disclosed.

TD, which already has a major retail presence in the U.S. northeastern states, says the acquisitions in Florida will help it broaden its market south of the border.

“These transactions, combined with the success of our U.S. franchise, put us in an even stronger position as we continue to build the first truly North American bank,” said Ed Clark, president and CEO of TD Bank.

The bank said the acquisitions allow the bank to accelerate its organic growth in Florida and come with limited downside credit risk, calling it a “win-win for our customers and shareholders alike.”

“Instead of building new stores, as they are called in the States, really this just speeds it up,” Clark said in a telephone interview with The Canadian Press.

“It would have taken us five years to build this many stores and we get them right from the get-go but they (also) come already staffed up and (with) millions of dollars of deposits already in them.”

“From my investors’ point of view, this is absolutely consistent with what I’ve been saying for over a year,” he said of the acquisitions.

Under the deals, TD Bank has entered into a purchase and assumption agreement with the FDIC, covering Riverside’s 58 branches in central Florida and adding to TD Bank’s already growing network. Separate agreements also cover First Federal’s eight locations and AmericanFirst’s three locations. In addition, TD Bank will gain a total of 80 bank machines.

In total, TD Bank is buying US$3.8 billion in assets, including loans of $2.1 billion, all of which are covered by a loss-share agreement. As well the bank will acquire $3.1 billion in deposits.

Friday’s deals continue the expansion of Canada’s banks in the United States, where they have been growing in recent years and looking for further takeover opportunities caused by the troubles in the U.S. banking system.

At TD’s annual meeting in Quebec City in March, Clark said the bank would be looking for acquisitions in the southeast U.S. coast area involving smaller banks with assets of less than $10 billion.

“We’re really right now not anxious to do anything bigger than that until we get a little more clarity about where the U.S. economy is going,” he said at the time.

Clark said Friday that his view of making smaller acquisitions had not changed and hinted that others are possible this year.

“I think if more FIDC deals became available, we would certainly look at them,” he said.

“If we see banks that have stores in locations where we would like to see ourselves build out and they’re either FDIC-assisted or they are small enough that we can sort of self-insure on the asset side then would definitely do more.”

The U.S. southeastern states are in an area that has been hit hard by the sub-prime mortgage crisis and collapse in the housing industry, squeezing the financial industry and producing large losses for banks and other mortgage lenders.

TD Bank already has a major presence in the northeastern U.S. states, primarily in New England and New York state through its purchase a few years ago of Banknorth Group, a U.S. retail bank.

TD also owns about 40% of TD Ameritrade, a discount brokerage based in the United States midwest.

Many of the bank’s competitors are also interested in taking advantage of bargains in the south and the U.S. northwest.

Royal Bank of Canada (TSX:RY), Canada’s largest bank, is a growing player in the Carolinas, Georgia and Florida, where is owns the former Centura Bank and Bank of Montreal’s (TSX:BMO) Harris Bank unit is a key player in the Chicago-area markets and other parts of the U.S. midwestern states.