The future name of the Carolina First Arena at the College of Charleston is up in the air now that the bank has agreed to be acquired by Canada-based TD Bank Financial Group.

Carolina First will come under Canadian ownership and be renamed TD Bank as part of a proposed $192 million sale of the struggling Upstate-based lender.

The South Financial Group Inc., Carolina First's parent, agreed Monday to be acquired by TD Bank Financial Group for $61 million, or 28 cents a share, a steep discount from the closing price of 67 cents on Friday.

Also, the Toronto-based buyer will pay $131 million to retire the government's investment in South

Financial, resulting in a $216 million loss to taxpayers. The company received $347 million in federal bailout money under the U.S. Treasury Department's Troubled Asset Relief Program in late 2008.

Executives and industry analysts said Monday that the sale to the much bigger and healthier TD Bank, which is the U.S. counterpart to Canada's Toronto-Dominion Bank, was the best possible alternative for Carolina First.

"Our board and management have conducted a broad and extensive process over the last six months to seek the best outcome for our shareholders, as well as for our customers, employees and the communities which we serve," said Lynn Harton, South Financial Group's president and chief executive officer. "TD is a strongly capitalized financial institution with a prudent approach to risk management. It is committed to maintaining TSFG's tradition of customer service and community involvement."

South Financial's two lending arms -- the other operates under the name Mercantile Bank -- have been pummeled by soured real estate loans, especially in the Florida market.

The Greenville-based company recently reported its ninth-consecutive quarterly loss, a deficit that has added up to about $1.4 billion over the past two years. In January, the company suspended all dividends to conserve cash.

Facing pressure from government regulators, South Financial agreed this month to take steps to strengthen its balance sheet. A merger with another financial institution was identified as one of its option.

Carolina First operated 110 branches as of March 31, including seven offices in the local area.

Harton said the sale will include the $2 million naming rights deal for the Carolina First Arena on Meeting Street, home of the College of Charleston's basketball program.

Largely unknown in South Carolina, TD Bank is one of the 15 largest commercial banks in the United States. Bharat Masrani, president and chief executive officer, said South Financial's operations will be integrated and renamed, probably starting in 2011.

"This whole transaction is all about growth," Masrani said Monday in a telephone interview.

TD Bank has been expanding into U.S. markets over the past few years with a "Maine-to-Florida" strategy. Less than a month ago, it agreed to buy the assets of three insolvent lenders in the Sunshine State.

"It is our intention to grow our business in the U.S. ... This expands our presence in Florida quite substantially, and it gives us a great position in the Carolinas," Masrani said.

Harton is expected to join TD Bank's management, stay in Greenville and report to Masrani.

Shares of South Financial plummeted after the early morning announcement, amid heavy trading volume. The stock fell to 30 cents, down 55 percent from Friday.

Bank experts said the sale is the best possible scenario for South Financial, which could have failed if it remained independent and was unable to raise enough money on its own. If that were the case, investors, including the Treasury Department, would be wiped out completely.

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"We have seen many banks fail, and the fact that The South Financial Group avoided that sort of dire situation, I think, is somewhat of a moral victory for the shareholders and certainly for the board," said Chris Marinac, a research analyst with FIG Partners LLC in Atlanta.

Marinac said that a capital-raising effort would have been expensive, which in turn would have created more "downside risk" for investors.

"So while it looks like it is being sold at a very, very low price, you have to keep in mind that there was going to have to be additional capital raised for this company," he said. "So it's not as necessarily as cheap as it looks on the surface."

Bob Patten, who follows South Financial's stock for Morgan Keegan & Co., gave management a grade of B-plus for finding a solid buyer and saving the company.

"They actually did a better deal than everybody thought," Patten said.

He said it absolutely would have been "more costly to taxpayers" if South Financial was seized in what he called a government "take-under."

Also, the sale to a healthier bank will give South Financial investors who take TD Bank stock instead of cash a better chance of recouping some of their losses.

"This clearly was a good move for taxpayers and a better move for shareholders," Patten said.

South Financial canceled its annual meeting of stockholders, which had been scheduled for today in Greenville, after the sale was announced.

Reach John McDermott at 937-5572 or