In a move that will give Canada”™s second-largest bank an even greater presence on this side of the border, TD Bank bought Commerce Bancorp., with headquarters in Cherry Hill, N. J., for a reported $8.5 billion in stock and cash October 2.
TD Bank Canada owns TD Banknorth and its nearly 600 branches, most located in New England and the mid-Atlantic states. TD Banknorth has 14 branches in Orange County, two in Ulster County and two in Sullivan County. Commerce has branches in Westchester County in Jefferson Valley, Mount Kisco, Thornwood, White Plains, Port Chester, Rye, Mamaroneck, Scarsdale and two in Larchmont, plus branches in Fairfield County, Conn.
TD Bank owns more than 1,000 TD Canada Trust banks in Canada. It first infused itself into US markets in 2004 when it bought out New England”™s Banknorth.
The deal does not include Commerce Banc Insurance Services, which is being spun off as a separate company. Commerce”™s brokerage numbers among the 25 largest in the nation with more than $1 billion in premiums.
This latest move reflects TD”™s continued expansion into the US markets. In July 2005, it acquired Hudson United Bank; in 2006, it acquired Interchange Financial Services Corp. of New Jersey.
TD Bank had more than $400 billion in assets in mid-third quarter 2007, while Commerce listed assets of approximately $48 billion as of Sept. 30.
At press time, publicly held Commerce was trading at $39.47 on the New York Stock Exchange (symbol: CBH). The terms for TD”™s buyout include 75 percent in stock as part of the acquisition, valued at $42 per share.
This is a good time for Canadians ”“ corporate or otherwise ”“ to shop south of the border, given the recent surge in the Canadian dollar. The acquisition must be approved by federal regulators and stockholders.
At last report, TD Banknorth had $626 million in deposits in 19 Fairfield County branches, making it the 10th-largest bank in terms of local market shares.
TD Banknorth entered the market via its $1.9 billion acquisition in 2005 of Hudson United Bancorp.
Commerce likewise launched its Fairfield County foray in 2005, but chose to open new branches rather than acquire a bank here. At the time, the company aired plans to open 25 branches in Fairfield County, but as of the TD Banknorth announcement last week had opened only five. The bank”™s initial branches in Fairfield and Norwalk generated deposits of $15 million and $11 million, respectively, after one year of operation.
Commerce Bancorp was founded in 1973 by real estate and fast-food franchise developer Vernon Hill, who emphasized customer service in touches such as describing branches as “stores” open seven days a week; posting “fan mail” on its Web site (including a 2006 letter from a Westport couple who commended the bank for a quick turnaround on a home mortgage); and eliminating the appearance of partitions that traditionally separate employees and clients inside branches.
Hill was replaced as CEO in June following a federal probe into business Commerce Bank steered to a design and decoration company owned by Hill”™s wife. At the time, analysts predicted the change in leadership would make Commerce Bank a takeover target.
The deal would gives TD Banknorth more than $16.5 billion in deposits in New Jersey, where it trails only Bank of America Corp., Wachovia Corp. and PNC Bank in market share.
(Alexander Soule contributed to this story.)
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