Bank acquisitions: TD Bank deal points to recovery
TD Bank expands further into the US banking market; Change in FDIC loss-share means traditional bank M&A could return
TD Bank’s spending on acquisitions in the US in the last five years
The latest sale of failing US banks by the Federal Deposit Insurance Corp points to a return to traditional M&A methods and highlights the system’s improving health, say bankers. In April, TD Bank bought three Florida banks with loss-share agreements with the FDIC that were less attractive than in previous deals. "There is still such a bank-buying frenzy that acquirers are prepared to pay the premiums but these are no longer golden ticket deals," says an M&A adviser who prefers to remain anonymous as he is advising the FDIC on deals. "We expect the changes in deal premiums will lead to traditional unassisted bank M&A," he says. TD Bank acquired AmericanFirst Bank, First Federal Bank of North Florida and Riverside National Bank of Florida. Together the banks add $3.1 billion in deposits and $3.8 billion in assets to TD Bank. Ed Clark, president and chief executive, says the deal has saved the firm five years compared with growing organically.