e425
Filed by The Toronto-Dominion Bank
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: The South Financial Group, Inc.
Commission File No.: 0-15083
This filing, which includes a communication sent to employees of TD Bank, Americas Most
Convenient Bank and the Toronto-Dominion Bank on June 14, 2010, may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 and
comparable safe harbour provisions of applicable Canadian legislation, including, but not limited
to, statements relating to anticipated financial and operating results, the companies plans,
objectives, expectations and intentions, cost savings and other statements, including words such as
anticipate, believe, plan, estimate, expect, intend, will, should, may, and other
similar expressions. Such statements are based upon the current beliefs and expectations of our
management and involve a number of significant risks and uncertainties. Actual results may differ
materially from the results anticipated in these forward-looking statements. The following
factors, among others, could cause or contribute to such material differences: the ability to
obtain the approval of the transaction by The South Financial Group, Inc. shareholders; the ability
to realize the expected synergies resulting from the transaction in the amounts or in the timeframe
anticipated; the ability to integrate The South Financial Group, Inc.s businesses into those of
The Toronto-Dominion Bank in a timely and cost-efficient manner; and the ability to obtain
governmental approvals of the transaction or to satisfy other conditions to the transaction on the
proposed terms and timeframe. Additional factors that could cause The Toronto-Dominion Banks and
The South Financial Group, Inc.s results to differ materially from those described in the
forward-looking statements can be found in the 2009 Annual Report on Form 40-F for The
Toronto-Dominion Bank and the 2009 Annual Report on Form 10-K of The South Financial Group, Inc.
filed with the Securities and Exchange Commission and available at the Securities and Exchange
Commissions Internet site (http://www.sec.gov).
The proposed merger transaction involving The Toronto-Dominion Bank and The South Financial
Group, Inc. will be submitted to The South Financial Group, Inc.s shareholders for their
consideration. The Toronto-Dominion Bank and The South Financial Group, Inc. have filed with the
SEC a Registration Statement on Form F-4 containing a preliminary proxy statement/prospectus and
each of the companies plans to file with the SEC other documents regarding the proposed
transaction. Shareholders are encouraged to read the preliminary proxy statement/prospectus
regarding the proposed transaction and the definitive proxy statement/prospectus when it becomes
available, as well as other documents filed with the SEC because they contain important
information. Shareholders may obtain a free copy of the preliminary proxy statement/prospectus,
and will be able to obtain a free copy of the definitive proxy statement/prospectus when it becomes
available, as well as other filings containing information about The Toronto-Dominion Bank and The
South Financial Group, Inc., without charge, at the SECs Internet site (http://www.sec.gov).
Copies of the definitive proxy statement/prospectus and the filings with the SEC that will be
incorporated by reference in the definitive proxy statement/prospectus can also be obtained, when
available, without charge, by directing a request to TD Bank Financial Group, 66 Wellington Street
West, Toronto, ON M5K 1A2, Attention: Investor Relations, 1-866-756-8936, or to The South Financial
Group, Inc., Investor Relations, 104 South Main Street, Poinsett Plaza, 6th Floor, Greenville,
South Carolina 29601, 1-888-592-3001.
The Toronto-Dominion Bank, The South Financial Group, Inc., their respective directors and
executive officers and other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding The Toronto-Dominion Banks
directors and executive officers is available in its Annual Report on Form 40-F for the year ended
October 31, 2009, which was filed with the Securities and Exchange Commission on December 03, 2009,
its notice of annual meeting and proxy circular for its 2010 annual meeting, which was filed with
the Securities and Exchange Commission on February 25, 2010, and the above-referenced Registration
Statement on Form F-4, which was filed with the SEC on June 10, 2010. Information regarding The
South Financial Group, Inc.s directors and executive officers is available in The South Financial
Group, Inc.s proxy statement for its 2010 annual meeting, which was filed with the Securities and
Exchange Commission on April 07, 2010. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or
otherwise, is contained in the above-referenced Registration Statement on Form F-4, which was filed
with the SEC on June 10, 2010, and other relevant materials to be filed with the SEC when they become available.
THE FOLLOWING IS A COMMUNICATION SENT TO EMPLOYEES OF TD BANK, AMERICAS MOST CONVENIENT BANK
AND THE TORONTO-DOMINION BANK ON JUNE 14, 2010.
Daily News Brief
June 14, 2010
Compiled by Jimmy A. Hernandez, Corporate and Public Affairs
TD BANK NEWS
1. |
|
Investors Ease Strain on F.D.I.C. The New York Times |
After contending with nearly 240 bank failures since the financial crisis struck, the Federal
Deposit Insurance Corporation is finally getting some help from private investors. [TD Banks
Bharat B. Masrani is quoted]
2. |
|
Floridas Bank Failures Prove To Be A Boon To Their Buyers The Herald Tribune (FL) |
If there is one sure way to grow a bank in Florida these days, its by taking over a failed bank.
[TD Bank is mentioned.]
3. |
|
Fewer Banks Have Crisis-Level Ranking South Florida Business Journal |
Trouble was still widespread at South Florida banks in the first quarter, but fewer banks where in
problematic condition, according to Bauer Financial. [TD Bank is mentioned.]
INDUSTRY NEWS
1. |
|
Boston Banker Returns to Maine Roots to Rescue Ailing Thrift American Banker |
With more New England banks notably in recession-plagued Maine showing signs of stress, its
noteworthy that Savings Bank of Maine caught a lifeline, and in the nick of time.
2. |
|
New Bank Overdraft Measures Coming This Summer Seacoast Online (NH) |
New federal regulations that will soon go into effect will change how banks handle overdraft
services for ATM withdrawals and debit card purchases. The change could be substantial as,
according to the Consumer Federation of America, consumers paid banks an estimated $38 billion in
overdraft fees on debit purchases and checks last year.
Page 1 of 11
TD BANK NEWS
1. |
|
Investors Ease Strain on F.D.I.C.
By Eric Dash
June 13, 2010 The New York Times |
After contending with nearly 240 bank failures since the financial crisis struck, the Federal
Deposit Insurance Corporation is finally getting some help from private investors.
A spate of recent banking takeovers and investments suggests that stronger financial institutions
and private investment firms see value in the detritus of American banking. That is good news for
the F.D.I.C., which has had to shoulder the cost of failures through its deposit insurance fund,
causing the fund to sink into the red.
We are seeing light at the end of the tunnel, Sheila C. Bair, the head of the F.D.I.C., said in a
recent interview.
Now that some troubled banks are being taken over by private investors, rather than closed by the
government, the pressure on the F.D.I.C. is beginning to ease. On Thursday, the agency, which
administers the fund protecting savers deposits, is expected to announce that it lowered the
amount of money it set aside to cover future losses by more than $3 billion during the first
quarter the first reduction since the second quarter of 2007.
The news is not all good, of course. Seventy-two banks have collapsed this year, and banking
analysts worry that more failures will follow, particularly among small and midsize lenders exposed
to troubled commercial real estate.
But with the economy stabilizing, banks that otherwise might have fallen are regaining their
footing. The nations biggest banks the ones considered too big to fail have roared back in
terms of profitability thanks to ultralow interest rates. Analysts say the growth of both troubled
consumer and corporate loans has begun to trail off.
We have been out of the recession long enough that it is starting to filter into the banking
system, Ms. Bair said. Not long ago, analysts predicted that the financial crisis and recession
might claim 1,000 of the nations 8,100 lenders. Now, they foresee perhaps 500 or 750 failures.
For the U.S. commercial banking industry, the worst is over, said Gerard Cassidy, a financial
services analyst at RBC Capital.
One reason that troubled banks are surviving is that other banks, as well as investors who
specialize in companies in distress, are swooping in, looking to buy lenders inexpensively. More
buyers are showing up at F.D.I.C. auctions, and to avoid a bidding frenzy, some are doing deals
with little or no government help.
On Monday, for instance, TD Bank of Canada announced that it would buy the South Financial Group.
Private investors recently have plowed money into other troubled institutions, like Synovus
Financial, Sterling Financial and Pacific Capital Bancorp.
Now that the economy is improving, investors are growing more confident that problem loans are at
or near their peak. That confidence has been reflected in banking stocks, which have soared 111
percent from their low in March 2009, as measured by the KBW bank index.
Page 2 of 11
In April, Thomas H. Lee Partners spent $134.7 million for a minority stake in Sterling Financial, a
lender based in Spokane, Wash., that has been hobbled by bad real estate loans.
More recently, Gerald J. Ford, the billionaire investor who made a fortune during the savings and
loan crisis, invested $500 million for a 91 percent stake in Pacific Capital Bancorp of Santa
Barbara, Calif. The bank had been trading at around $4. Mr. Ford paid 20 cents a share.
When it bought three banks in April, TD Bank agreed to swallow a bigger share of their future
losses than is typical in an F.D.I.C.-assisted deal. On Monday, TD paid a mere 20 cents a share for
South Financial. Although the F.D.I.C did not provide any aid, TD did get some federal help. The
Treasury Department agreed to sell $347 million of South Financial preferred shares and warrants
for a bargain-basement price of $130.6 million.
Without a doubt, there is more confidence than a few months ago, said Bharat B. Masrani, the head
of TD Banks United States operations. There is more transparency and confidence in the ultimate
losses of these institutions.
Andrew Williams, a Treasury spokesman, said that it had agreed to the discount, as in previous
deals, to minimize or eliminate our chances of incurring further losses on its investment in the
bank.
Of course, such unassisted deals may still be the exception for at least the remainder of the year.
The F.D.I.C. is expected to add to its list of problem banks now 702 when it releases its
quarterly report on Thursday. The agency does not disclose which banks it considers troubled, nor
does inclusion on the list mean that a bank is in imminent danger of failure.
Most of the banks on the list are tiny community lenders, largely in the Southeast and Midwest,
that would be more attractive if they were bundled together rather than sold as stand-alone
entities. Many of the potential buyers for these banks particularly other lenders that are still
trying to shore up their finances need government help to pursue deals.
We are not in any danger of running out of failed banks, said Wilbur L. Ross, a prominent bank
investor. The only question is how much investor demand there will be.
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2. |
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Floridas Bank Failures Prove To Be A Boon To Their Buyers
By John Hielscher
June 14, 2010 The Herald Tribune (FL) |
IF THERE IS ONE SURE WAY TO grow a bank in Florida these days, its by taking over a failed bank.
Several bank companies have dramatically boosted their Florida footprints in the past year by
buying failed institutions, according to new data from SNL Financial.
Two banks jumped into Floridas top 10 list, thanks to recent failed bank deals.
Page 3 of 11
BB&T, which a year ago operated the 14th largest bank in Florida, is No. 5 after buying the
collapsed Colonial Bank last year. Winston-Salem, N.C.-based BB&T jumped to $16.4 billion in
deposits from $4.4 billion.
Toronto-Dominion Bank, which ranked No. 40 in Florida a year ago, is now in 10th place after adding
$6.5 billion in deposits. TD Bank bought three failed banks the largest, Riverside National of
Fort Pierce, added $3.4 billion and it also is acquiring the teetering South Financial Group,
whose holdings included Mercantile Bank of Tampa.
IberiaBank, which bought the failed Century Bank of Sarasota and Orion Bank of Naples, made the
biggest jump, vaulting from 215th to 20th place after adding nearly $3 billion in deposits.
EverBank Financial of Jacksonville boosted its deposit base by more than $1 billion last month
after taking over three failed Bank of Florida units. But it wasnt enough to move it out of 11th
place among Florida banks.
Floridas deposit market remains dominated by Bank of America, with $72.7 billion; Wells Fargo &
Co., $64.2 billion; and SunTrust Bank, $39.9 billion. Those three hold a combined 45 percent market
share of the states deposits.
Iberiabanks oil spill exposure
IberiaBank was prompted last week to reassure investors about its potential exposure to the
devastating Deepwater Horizon oil spill.
Iberiabank Corp., based in Lafayette, La., lends to some of the businesses and industries that will
be affected most by the spreading oil spill in the Gulf of Mexico.
The company said it has a very small exposure to the fishing and seafood, tourism and energy
industries, the three sectors hit hardest by the spill now and likely in the future. Energy and
energy-transportation related loans total $183 million, or 3 percent of all loans. Exposure to the
fishing and seafood industries is less than $10,000. The company reported no loans to seasonal
beach tourist businesses.
Most of IberiaBanks Florida offices and loans are in the southwestern, southeastern and
northeastern regions all unaffected, so far, by the spill. Nearly all the loans picked up from
Century and Orion are covered by a Federal Deposit Insurance Corp. loss-share agreement five
years for commercial loans and 10 years for residential loans.
After reviewing the companys statement, analysts at Raymond James Equity Research reiterated their
strong buy rating on Iberiabanks stock.
While it is difficult to assess the longer-term economic impact, both direct and secondary, of the
oil spill, the company appears relatively unaffected, analyst Michael Rose said.
New Orleans-based Whitney Bank, which has offices in Manatee County, also said it is monitoring the
oil spill for any potential impact. A spokesman said it is too early to gauge any impact on its
business or customers.
Page 4 of 11
Adamson joins Stearns
Paul Adamson has joined Stearns Bank in Sarasota as senior banking officer.
He has 15 years of consumer and commercial banking experience, previously with Whitney Bank and
SouthTrust Bank.
Sabal bump
Sabal Palm Bank in Sarasota got a bump up from analyst BauerFinancial Inc. last week.
Bauer had initially rated Sabal Palm a one-star, or troubled, bank based on its first quarter
numbers.
Bank president Brian Hall says he informed the analyst that Sabal Palm had raised about $1 million
in new capital in April. We sold it ourselves, to friends and family, he said.
Bauer considered that and upped Sabal Palm to a two-star, or problematic, bank, Bauer president
Karen Dorway said.
Sabal Palm posted a $101,000 loss in the first quarter. The $95 million-asset bank remains well
capitalized under regulatory standards.
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3. |
|
Fewer Banks Have Crisis-Level Ranking
By Brian Bandell
June 11, 2010 South Florida Business Journal |
Trouble was still widespread at South Florida banks in the first quarter, but fewer banks where in
problematic condition, according to Bauer Financial.
The Coral Gables-based company issued ratings for 71 of the 76 local banks, with those not rated
either too new or recently closed by regulators.
Bauer Financial gave 32 of the banks it rated just two stars (problematic) or worse in the first
quarter, down from 36 in the fourth quarter. Fort Lauderdale-based Bank of Florida Southeast
wasnt rated after being closed in May.
Bauer Financial uses federal regulatory data to rate banks based on capital ratio, profit/loss
trend, delinquent loans and other factors. Bauer ranks from a high of five stars to a low of zero
stars.
Miami-based Sabadell United Bank shed its two-star rating to earn three stars in the first quarter
after new owner Banco Sabadell cleaned up its balance sheet.
The same fete was accomplished by Miami-based TotalBank, Palm Beach-based Lydian Private Bank,
North Palm Beach-based Enterprise Bank of Florida and Miami-based Executive National Bank. The
first three of those banks did so with help from capital injections from their owners.
Miami-based Union Credit Bank jumped from zero stars to three stars after Apollo Bancorp acquired
it and boosted its capital.
Page 5 of 11
Capital is still needed for the three local banks that Bauer dropped from one star to zero stars
during the first quarter: Coral Gables-based Great Florida Bank, Plantation-based OptimumBank and
Bank of Coral Gables.
The banks that remained at the bottom of the heap with zero stars were Bank of Miami, Miami-based
Ocean Bank, Metro Bank of Dade County, Lantana-based Sterling Bank, Aventura-based Turnberry Bank,
North Lauderdale-based Security Bank, Tamarac-based First East Side Savings Bank, and Home Federal
Bank of Hollywood. A pending acquisition by MaxBank would greatly improve Home Banks condition.
Of those zero star banks, only five (Metro Bank, Sterling Bank, Turnberry Bank, Bank of Miami and
OptimumBank) fell short of regulatory well capitalized guidelines on March 31.
Looking around Florida, a staggering 34 banks were short of well capitalized guidelines. While
not all of them will fail, its clear that the 13 bank closures in Florida so far in 2010 is just
the beginning.
Back to South Florida, Boca Raton-based EuroBank slipped from three stars to one star while
Doral-based U.S. Century Bank joined it with one star, after having two in the previous quarter.
The banks that remained at one star were Miami-based Great Eastern Bank of Florida, Palm Beach
Gardens-based SouthBank and Hallandale-based TransCapital Bank.
The only new South Florida bank on Bauers two-star list was West Palm Beach-based Grand Bank &
Trust of Florida, which previously had three stars. The remaining two-star banks were:
Fort Lauderdale-based BankAtlantic
Coconut Grove Bank
Homestead-based Community Bank of Florida
Miami-based Pacific National Bank
Homestead-based 1st National Bank of South Florida
Juno Beach-based Anchor Commercial Bank
Coconut Grove-based Biscayne Bank
Hallandale-based Desjardens Bank
Miami-based Eastern National Bank
West Palm Beach-based Flagler Bank
Miami-based Intercredit bank
Boca Raton-based Legacy Bank of Florida
Boca Raton-based Paradise Bank
Davie-based Regent Bank
Fort Lauderdale-based Valley Bank
Meanwhile, Bauer had the same roster of strongly capitalized banks with few loan problems in South
Florida. Bauer gave its top, five-star rating to Bank of Belle Glade, First National Bank of South
Miami and West Miami-based Intercontinental Bank.
The local banks that earned four stars were Miami-based Northern Trust,
Page 6 of 11
Boca Raton-based 1st United Bank, Oakland Park-based American National Bank and First Bank of
Miami.
Of course, the largest holders of deposits in South Florida are national and regional banks. There
are banks in nearby Florida counties that also impact our region. Heres how Bauer rated some of
them in the first quarter:
Bank of America three stars
Wells Fargo Bank three stars
CitiBank three stars
Branch Banking & Trust Co. four stars
JPMorgan Chase 3.5 stars
SunTrust Bank three stars
Regions Bank three stars
New York Community Bank/AmTrust four stars
HSBC Bank three stars
PNC Bank 3.5 stars
FirstBank of Puerto Rico/FirstBank Florida two stars
Banco Popular North America zero stars
Mercantile/Carolina First Bank one star (although its set to be acquired by TD Bank)
Englewood-based Peninsula Bank zero stars
TD Bank four stars
RBC Bank three stars
Third Federal five stars
Jacksonville-based Florida Capital Bank zero stars
Stuart-based Seacoast National Bank two stars
Orlando-based Seaside National Bank & Trust three stars
Naples-based TIB Bank zero stars
Port St. Lucie-based First Peoples Bank zero stars
Clewiston-based Olde Cypress Community Bank zero stars
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INDUSTRY NEWS
1. |
|
Boston Banker Returns to Maine Roots to Rescue Ailing Thrift
By Kate Davidson
June 14, 2010 American Banker |
John Everets great-great-grandfather arrived in Gardiner, Maine, in 1824, but it took an ailing
thrift to lure the Boston banker back to his ancestral home.
Everets led a group of investors that rescued Savings Bank of Maine, which serves a tiny community
an hour north of Portland, from the brink last month by spearheading a $60 million investment. The
$929 million-asset bank was significantly undercapitalized, and was under a prompt corrective
action order requiring it to boost capital by June 30.
With more New England banks notably in recession-plagued Maine showing signs of stress, its
noteworthy that Savings Bank of Maine caught a lifeline, and in the nick of time.
Page 7 of 11
This bank was just a shipwreck, said Gerard Cassidy, an analyst with RBC Capital Markets in
Portland. It had crashed, and these guys now are resurrecting it.
Everets, who became the companys chief executive after the recapitalization, paints an upbeat
picture but says much work lies ahead. In the last two weeks weve gone from being one of the most
troubled institutions, to being one of the most well capitalized in the Northeast, he said.
Everets the former chief executive of HPSC, a specialty finance company that he sold to General
Electric in 2004 brings with him a management team that includes several experienced bankers
with ties to Maine.
He said the team plans to shift from the commercial real estate lending that got the thrift in
trouble, and refocus on residential mortgages. Investors saw a chance to pick up market share in a
state where the housing market is stable, even though unemployment remains high.
We have the distribution in place through these 32 branches that we can really take advantage of,
which has not been done to date, he said. The company was seriously underperforming in that area,
and we think we can get it to be a significant performer.
But first, the thrift must clean house. As of March 31, 10.68% of Savings Bank of Maines loans
were not current, compared with 11.9% in September 2008. Nonperforming assets tripled in the first
half of 2009, and in August 2009 it was issued a cease-and-desist order by the Office of Thrift
Supervision.
By the end of the year, the thrift had a loss of $33.2 million, while its total risk-based capital
ratio had improved marginally to 7.48% from 6.39% as of Sept. 30. Cassidy said Savings Bank of
Maine ran amok with construction and commercial real estate lending, and did not have the
controls and processes in place to handle the assets when they started to go bad.
In September 2008, nearly 60% of the loan portfolio was composed of commercial real estate and
construction loans, according to the Federal Deposit Insurance Corp. Despite significant chargeoffs
in 2009, 82% of the loans in nonaccrual status at March 31 were in commercial real estate and
construction.
I think that they had been, how should I put it, a little more adventurous with their loans than
might have been prudent, said Theodore Kovaleff, an analyst with Horwitz & Associates. They found
themselves below various capital levels that safety and soundness would suggest.
Those lending practices led to a supervisory conversion, a seldom-used procedure under which the
OTS allows a mutual to convert to a stock holding company bypassing the typically lengthy review
process to raise capital quickly.
The thrift raised the capital through a private placement from SBM Financial an investor group
led by Everets and Willard B. Soper, the new president and a handful of others. Everets said the
conversion boosted capital levels to more than adequately capitalized an 8% total risk-based
capital ratio which the order specified must be reached by June 30.
Page 8 of 11
SBM Financial then absorbed Savings Bank of Maine, and Everets and Soper took over, along with a
handful of banking veterans looking to address the problems. My background is fixing companies,
and we will apply a lot of the techniques that have worked for us in the past, Everets said. The
first order of business will be working out the problem loan portfolios not selling them off
which Everets said could take up to 18 months.
After that, the bank will focus on improving its balance sheet by focusing on mortgage lending, an
area of expertise for the new management team. In the executive suite are Soper, a former senior
vice president of Shawmut Bank and chief executive of Kislak National Bank and J.I. Kislak & Co. in
Florida; David Ott, a former chief bank officer of Banknorth; James Ozanne, a former executive vice
president of GE Capital; and Ronald Roark, a founder and former chief executive of Crown Northcorp
in Ohio.
Cassidy said the capital infusion along with the talent of the management team should be enough to
turn around the company, despite the credit problems.
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2. |
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New Bank Overdraft Measures Coming This Summer
By Michael McCord
June 13, 2010 Seacoast Online (NH) |
New federal regulations that will soon go into effect will change how banks handle overdraft
services for ATM withdrawals and debit card purchases. The change could be substantial as,
according to the Consumer Federation of America, consumers paid banks an estimated $38 billion in
overdraft fees on debit purchases and checks last year.
Beginning Aug. 15 for existing accounts and July 1 for new ones, banks will be prohibited from
charging customers overdraft fees on ATM withdrawals and one-time debit card transactions unless
the customer agreed to pay these fees ahead of time. The so-called opt in provision was put into
place by the Federal Reserve to protect customers who overdraw on their account and pay as much as
a $35 initial charge, and subsequent daily fees on the overdrawn balance, as a courtesy banks
offer to customers.
If a debit card user does not have enough money in their account or funds are not yet available for
a purchase at the point of sale or withdrawal at an ATM, their transaction will be denied unless
they sign a form to opt in for overdraft service. The new law will not affect monthly electronic
transactions, such as automatic payments on a mortgage or utility bill, and will not affect
non-sufficient funds fees on checks that bounce.
Banks are reaching out to their customers in person and through letters to raise awareness about
the changes. On its Web site, Dover-based Federal Savings Bank said the new regulation requires us
to obtain your approval before we consider payment of your ATM withdrawals and everyday debit card
purchases that may create an overdraft in your checking account. The majority of our customers
prefer having this service to avoid the embarrassment of having their debit card purchase denied at
the grocery store checkout line, at the pharmacy when paying for prescriptions, or at a restaurant
when paying the bill.
As this writer found out in person, Citizens Bank tellers are asking customers to decline or accept
the opt-in provision by filling out the necessary government form. Citizens followed
up with a confirmation letter and a fee listing. For example, one overdraft day costs $22 per item,
$37 per item for two or more overdraft days, and a daily overdraft fee of $6.99 for days 3 through
12. The bank also offers customers overdraft protection alternatives such as linking checking to
savings accounts to create automatic transfers to cover potential overdrafts.
Page 9 of 11
Beginning June 19, Bank of America said it will do away with overdraft fees on debit-card
purchases. The bank will refuse to cover one-time debit transactions of account holders who dont
have enough cash in their accounts thereby eliminating the current $35 overdraft fee. The bank
said it will continue granting ATM withdrawals for customers who go over their balances for a fee
of $35 but customers will need to respond affirmatively to two prompts before being able to
overdraft their accounts.
Christine Conrad, senior vice president with Maine-based Androscoggin Bank, said her bank is taking
extra steps that, in conjunction with overdraft privilege services, will help account holders be
aware of their account balance at all times. Among these measures, she explained, is an e-messenger
capability, which allows users to set the online banking system to send an e-mail alert should
their account balance fall below a set amount.
In the midst of the recent media coverage around the federal governments new rules regarding
overdraft privileges, we wanted to make sure consumers know there are alternative tools to aid in
effective account management, Conrad said. The banks new e-mail and text alerts allow our
account users the ability to view their finances on a mobile device no matter the time or location
before their card is even swiped.
Despite media coverage and a major outreach by the banking industry, a recent Harris Poll showed
the public is barely aware of the changes. Only 27 percent of consumers claim to know all about the
new regulations while most have just heard a little (37 percent) or never heard of the changes (36
percent). But this general lack of knowledge likely derives from the fact that only one in five
Americans, or 19 percent, report having ever overdrawn their account within the past year.
Piscataqua Savings Bank in Portsmouth is one bank that hasnt had to notify its customers about the
changes it never authorized ATM or debit charge overdrafts.
Basically (the new law) is not going to affect us or our customers, said Joan Gile, senior vice
president of operations for Piscataqua Savings. Gile said if customers request it, the bank does
set up an automatic savings account transfer to cover ATM/debit card overdrafts.
The bank does charge fees for checks that are overdrawn or for stop-payment requests. But not
offering fee-based overdraft protection was a conscious choice of Piscataqua Savings because it
believes customers are better off not spending money they dont have.
Our bank philosophy is not to service-charge our customers to death, Gile said.
Material from the Associated Press was used in this story.
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The Daily News Brief is published exclusively for the Employees of TD Bank; please do not
distribute outside the company.
Page 10 of 11
The information presented may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and comparable safe harbour provisions of
applicable Canadian legislation, including, but not limited to, statements relating to anticipated
financial and operating results, the companies plans, objectives, expectations and intentions,
cost savings and other statements, including words such as anticipate, believe, plan,
estimate, expect, intend, will, should, may, and other similar expressions. Such
statements are based upon the current beliefs and expectations of our management and involve a
number of significant risks and uncertainties. Actual results may differ materially from the
results anticipated in these forward-looking statements. The following factors, among others,
could cause or contribute to such material differences: the ability to obtain the approval of the
transaction by The South Financial Group, Inc. shareholders; the ability to realize the expected
synergies resulting from the transaction in the amounts or in the timeframe anticipated; the
ability to integrate The South Financial Group, Inc.s businesses into those of TD Bank Financial
Group in a timely and cost-efficient manner; and the ability to obtain governmental approvals of
the transaction or to satisfy other conditions to the transaction on the proposed terms and
timeframe. Additional factors that could cause TD Bank Financial Groups and The South Financial
Group, Inc.s results to differ materially from those described in the forward-looking statements
can be found in the 2009 Annual Report on Form 40-F for The Toronto-Dominion Bank and the 2009
Annual Report on Form 10-K of The South Financial Group, Inc. filed with the Securities and
Exchange Commission and available at the Securities and Exchange Commissions Internet site
(http://www.sec.gov).
The proposed merger transaction involving The Toronto-Dominion Bank and The South Financial Group,
Inc. will be submitted to The South Financial Group, Inc.s shareholders for their consideration.
The Toronto-Dominion Bank and The South Financial Group, Inc. have filed with the SEC a
Registration Statement on Form F-4 containing a preliminary proxy statement/prospectus and each of
the companies plans to file with the SEC other documents regarding the proposed transaction.
Shareholders are encouraged to read the preliminary proxy statement/prospectus regarding the
proposed transaction and the definitive proxy statement/prospectus when it becomes available, as
well as other documents filed with the SEC because they contain important information.
Shareholders may obtain a free copy of the preliminary proxy statement/prospectus, and will be able
to obtain a free copy of the definitive proxy statement/prospectus when it becomes available, as
well as other filings containing information about The Toronto-Dominion Bank and The South
Financial Group, Inc., without charge, at the SECs Internet site (http://www.sec.gov). Copies of
the definitive proxy statement/prospectus and the filings with the SEC that will be incorporated by
reference in the definitive proxy statement/prospectus can also be obtained, when available,
without charge, by directing a request to TD Bank Financial Group, 66 Wellington Street West,
Toronto, ON M5K 1A2, Attention: Investor Relations, 1-866-486-4826, or to The South Financial
Group, Inc., Investor Relations, 104 South Main Street, Poinsett Plaza, 6th Floor,
Greenville, South Carolina 29601, 1-888-592-3001.
The Toronto-Dominion Bank, The South Financial Group, Inc., their respective directors and
executive officers and other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding The Toronto-Dominion Banks
directors and executive officers is available in its Annual Report on Form 40-F for the year ended
October 31, 2009, which was filed with the Securities and Exchange Commission on December 03, 2009,
its notice of annual meeting and proxy circular for its 2010 annual meeting, which was filed with
the Securities and Exchange Commission on February 25, 2010, and the above-referenced Registration
Statement on Form F-4, which was filed with the SEC on June 10, 2010. Information regarding The
South Financial Group, Inc.s directors and executive officers is available in The South Financial
Group, Inc.s proxy statement for its 2010 annual meeting, which was filed with the Securities and
Exchange Commission on April 07, 2010. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or
otherwise, is contained in the above-referenced Registration Statement on Form F-4, which was filed
with the SEC on June 10, 2010, and other relevant materials to be filed with the SEC when they
become available.
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