Bank merger to provide $50B in community investments
The Toronto-based banking giant seeking to acquire Tennessee’s biggest bank has reached an agreement to provide an estimated $50 billion in loans, investments and assistance to local communities across its expanded service territory once the merger is completed.
Toronto-Dominion Bank, which does business as TD Bank and is seeking regulatory approval to complete a $13.4 billion purchase of First Horizon Bank, has signed a community benefits plan with the National Community Reinvestment Coalition to provide lending, philanthropy, banking access and other activities for diverse and underserved communities.
TD Bank plans to open at least 25 new branches and 25 ATMs in underserved areas during the next five years and will not have any mergerrelated First Horizon store closures. The agreement also includes the creation of a $40 million TD New Horizon Foundation, which will focus on giving in First Horizon markets, including Chattanooga, over the next five years. The new foundation will replace the existing First Horizon Foundation.
“Banks have an important role in providing economic opportunity and supporting changes that help low- and moderateincome, diverse and underserved communities achieve their financial goals,” TD Bank President Leo Salom said in a statement.
TD announced the community benefits agreement this week shortly after it said the “outside date” for the purchase of First Horizon Bank was extended from Feb. 27 to May 27. During the Canadian Bank CEO Conference in Toronto earlier this month, TD Bank CEO Bharat Masrani cited the regulatory approval process and ongoing discussions for the bank to complete a community benefits agreement as reasons for the delay in acquiring Memphis-based First Horizon.
Under the community benefits agreement, TD Bank pledged to increase residential mortgage loans to at least $21 billion, including loans to first-time homebuyers and those in lower- and moderate-income communities. The bank also plans to offer $7.75 billion in lending to small businesses with under $1 million in annual revenue with a focus on minority- and women-owned businesses and provide another $17.5 billion in community development loans and other investments to support economic development activities and affordable housing projects.
TD Bank will meet annually with the National Community Reinvestment Coalition to measure progress on the plan.
“The deal we just signed will ensure that communities of need see tangible increases in resources and economic opportunity in their neighborhoods — as every bank merger is legally required and morally bound to do,” Jesse Van Tol, president of the National Community Reinvestment Coalition, said in an announcement of the agreement.
Pending final regulatory approval, TD Bank is expected to complete its purchase of First Horizon Bank this spring and begin to convert the First Horizon bank locations to the TD Bank brand next year.
First Horizon, formerly First Tennessee Bank, is the largest bank in
Tennessee with 146 offices and more than $40.4 billion in total deposits, including 16 offices and more than $3.2 billion in deposits in metropolitan Chattanooga, according to June 30, 2022, data compiled by the Federal Deposit Insurance Corp.
The deal will help Toronto Dominion’s U.S. franchise emerge among the top six U.S. banks with about $614 billion in assets and a network of 1,560 branches across 22 states.
“This is an exciting new chapter in Chattanooga’s banking history,” Jay Dale, Chattanooga market president for First Horizon, said in a statement Friday. “TD Bank is committed to the communities and customers they serve, and we can’t wait to put that enthusiastic support to work in Chattanooga.”
— Compiled by Dave Flessner