TD Bank Financial Group (NYSE:TD) to Acquire South Financial Group for $191.6 million

TD Bank Financial Group (NYSE:TD) announced Monday it will acquire  South Financial Group for $191.6 million, which will give them 176 more branches in the Southeast United States.

Terms of the deal will include payment of $61 million in cash to shareholders by TD, along with an additional $130.6 million to the U.S. Treasury Department for stock, warrants and dividends which have accrued but haven't been paid.

Group head of U.S. Personal and Commercial Banking at TD Bank, Bharat Masrani, said about the deal, "In addition to the evaluation we came up with to pay shareholders, when we looked at the evaluation of the company with the metrics that we follow, it meant that we had to have this particular kind of deal with the U.S. Treasury."

TD recently bought other assets with a lot of risk in Florida, where they acquired Riverside National Bank of Florida, First Federal Bank of North Florida and AmericanFirst Bank with the aid of the FDIC of the U.S. They paid $3.8 billion for those banks.

The Canadian bank has been looking to expand in the North and South Carolina region, which is an important part of their expansion strategy in the U.S., the bank said. That is where the bulk of the branches included with the purchase of South Financial are located.

Fitch ratings suggested they may raise their outlook for South Financial.