Toronto-Dominion Bank is buying the troubled parent of Mercantile Bank, accelerating the Canadian institution's push to become a major player in Florida banking.
Mercantile, with 19 branches in the Tampa Bay area, is part of the South Financial Group. The Greenville, S.C.-based bank operates as Carolina First in the Carolinas.
Under a government-brokered deal announced Monday, Toronto-Dominion, which goes by TD Bank in the United States, is paying $191.6 million in cash and stock for South Financial.
The U.S. Treasury has agreed to sell about $347 million of preferred stock in South Financial to TD through its Troubled Asset Relief Program program. The government will discharge all accrued but unpaid dividends on the stock for $130.6 million.
South Financial has 176 branches in the Southeast, including 66 locations in Florida operating under the Mercantile banner. The bank has long blamed its financial woes largely on problem residential and land development loans in Florida.
TD Bank last month took over three failing Florida banks: Riverside National Bank of Florida in Fort Pierce, AmericanFirst Bank in Clermont and First Federal Bank of North Florida in Palatka.
Monday's deal acquiring South Financial "builds on our organic growth capability and the momentum of our recent acquisitions in the deposit-rich Florida market," TD Bank president and CEO Bharat Masrani said in a statement.
In announcing the deal, South Financial Group simultaneously postponed its annual meeting, which was supposed to be held Tuesday.
South Financial said the deal is expected to close later this year pending regulatory and shareholder approval.