The sale of Carolina First's owner to a Canadian financial giant was all but sealed Tuesday when shareholders of the struggling bank's parent company approved the $192 million deal.
The Upstate lender will be renamed TD Bank as its operations, including a handful of branches in the greater Charleston area, are merged into the TD Bank Financial Group.
The South Financial Group Inc., Carolina First's parent, agreed earlier this year to be acquired by TD. The Greenville-based company said about 66 percent of its shareholders voted in favor of the sale at a special meeting Tuesday.
Standard and Poor's said it plans to remove shares of South Financial from its S&P SmallCap 600 stock index this week, saying it expects the TD purchase to be finalized on or about Sept. 30.
No branch closings are planned as TD has no overlapping retail lending operations in Carolina First's banking territories.
Largely unknown in South Carolina, the U.S. arm of Canada's Toronto- Dominion Bank is one of the 15 largest commercial lenders in the United States. Bharat Masrani, its chief executive officer, said this year that South Financial's operations would be integrated and renamed, probably starting in 2011.
TD has been expanding into U.S. markets over the past few years with a "Maine-to-Florida" strategy. It agreed this year to buy the assets of three insolvent lenders in the Sunshine State. The South Financial purchase, which includes Florida's Mercantile Bank, soon followed.
"This expands our presence in Florida quite substantially, and it gives us a great position in the Carolinas," Masrani said in May.
H. Lynn Harton, South Financial's president and CEO, told The Greenville News after Tuesday's meeting that he will have expanded responsibilities with the combined businesses and that he expects the company to establish a regional hub in the Upstate.
That could lead to more jobs in the Greenville area, Harton said. In addition, TD will maintain a strong civic and community commitment, he said.
South Financial said Harton was not available Tuesday to speak with The Post and Courier. In May, he said Carolina First's $2 million deal to put its name on the College of Charleston basketball arena would be included in the sale to TD.
Formed in 1996, Carolina First grew quickly to become the largest bank headquartered in the state, with 110 branches in South Carolina and North Carolina, including seven in the Charleston area. Under founder and former CEO Mack Whittle, the business expanded into Florida, where the housing market was taking off.
That heady growth came with a heavy price. In recent years, South Financial's two banks have been hammered by bad real estate loans. The mounting losses forced the company either to raise more money or find a healthy buyer.
The sale terms included $61 million in cash, or 28 cents a share for a stock that was fetching more than $20 just three years ago. Also, TD has agreed to pay $131 million to retire the U.S. government's investment, resulting in a $216 million loss to taxpayers. South Financial received $347 million in bailout money from the U.S. Treasury Department in late 2008.
Industry experts have said the deal was the best possible outcome for South Financial and taxpayers.
The terms of the sale became a sore point for some shareholders, who saw the value of their investments shrivel. A lawsuit brought against the bank owner's board of directors over the "shockingly low" price was quickly settled.
The Greenville News contributed to this report.