Toronto-Dominion Bank said it would open 15 new branches in Charlotte, North Carolina, by 2025, including three or four in underserved areas.
The planned expansion comes as the bank waits for regulatory approval of its $13.4 billion acquisition of Memphis, Tennessee-based First Horizon. The deal to create the sixth-largest bank by assets in the U.S. has faced close regulatory scrutiny.
Regulators in Washington have vowed to more closely consider the impact of new, large banks on the financial system, and
Community groups in the past have waited to endorse potential mergers until they have secured specified investments in local communities.
TD said Thursday that it expects to open the first set of proposed branches in Charlotte next summer. The Canadian bank committed to placing around 25% of the branches in majority-minority or low-to-moderate income areas.
TD has previously said it will not close any branches because of the First Horizon deal.
TD currently operates 11 branches in North Carolina, and its commercial lending, auto finance and digital banking operations already have a presence in Charlotte. The 15 new branches would mark TD's physical entry into the Charlotte market, where First Horizon also maintains a branch footprint.
"We were looking at this [expansion] for a long time, even before First Horizon," said Ernie Diaz, TD's head of consumer distribution. "We've got the belief that this market is going to show substantial growth over the next five years."
The First Horizon deal would bolster TD's footprint in the lucrative Southeast market, a region that has drawn attention in recent years from banks with growth ambitions. The area boasts strong economic activity and booming population centers — attractive features for banks that lend to both business and consumers.
TD is interested in opening additional branches in both North Carolina and Florida, including in high-growth areas where First Horizon currently operates, Leo Salom, the bank's U.S. president, said at an industry conference Wednesday.
The Center for Responsible Lending, the Woodstock Institute and other left-leaning groups argue that the $13.4 billion merger will harm low-income communities, reduce small-business lending and add to systemic risk.
The acquisition of First Horizon would give TD branches in key Southern states where it already operates branches, including Florida, North Carolina, South Carolina and Virginia. It would also mark TD's entry into Tennessee and Georgia. If the deal is completed, TD's U.S. branches would number more than 1,500.
TD Bank must pay 65 additional cents per First Horizon share if the deal doesn't close by November 27. If it's still on the table a year after its announcement, both parties can opt out of the deal.
