Canada’s TD Banknorth to Buy N.J.’s Commerce Bank; Sell Insurance Unit

October 2, 2007

Canada’s TD Bank Financial Group reports that it will acquire the Mid-Atlantic regional bank Commerce Bancorp Inc. in a 25 percent cash and 75 percent stock deal valued at $8.5 billion.

If approved, the purchase would double TD Bank’s presence in the U.S. by adding nearly 460 Commerce branches on the East Coast. TD Bank Financial Group said it would become the seventh largest bank in North America as measured by branch locations and the first bank with “critical mass” in both Canada and the U.S.

In addition, Commerce has agreed to negotiate the sale of its $1 billion Commerce Banc Insurance Services, Inc. (CBIS) to George E. Norcross, III, who founded the insurance division and is currently chairman and chief executive officer of CBIS and a director of the Commerce board. Any sale would be subject to the approval of TD Bank Financial Group.

“Commerce gives us scale in the Mid-Atlantic and will allow us to turbocharge our organic growth strategy,” said Bharat Masrani, president and chief executive officer, TD Banknorth “We look forward to creating the first truly integrated, North American financial services powerhouse.”

“The combination of Commerce with TD Banknorth doubles the scale of our U.S. banking business and accelerates our transformation to a leading North American financial institution,” said Ed Clark, president and chief executive officer, TD Bank Financial Group. “Commerce brings an impressive geographic footprint and market share in a contiguous region and a complementary North American retail banking business model.”

Under the agreement, Commerce shareholders will receive 0.4142 shares of a TD common share and $10.50 in cash in exchange for each common share of Commerce Bancorp Inc. The consideration was negotiated on the basis of $42.00 per share value for Commerce Bank.

The bank acquisition is expected to close in March or April 2008 subject to approvals from Commerce shareholders and U.S. and Canadian regulatory authorities.

TD Bank has about $400 billion in assets and Commerce, about $48 billion. TD Bank owns TD Waterhouse Canada and TD Waterhouse U.K., along with a stake in TD Ameritrade.

TD Banknorth’s banking subsidiary, TD Banknorth, N.A., operates banking divisions in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Vermont.

TD Banknorth also operates an insurance division, TD Banknorth Insurance Agency, Inc., which is New England’s largest insurance network with 15 offices in Massachusetts, Connecticut, New Hampshire, Maine and upstate New York.

The operations of Commerce Bank include nearly 460 locations and close to 700 automated teller machines throughout New Jersey, New York, Connecticut, Pennsylvania, Delaware, Washington, DC, Virginia, Maryland and Southeast Florida.

Commerce Banc Insurance Services (CBIS) ranks among the 25 largest insurance agencies in the nation, with $1 billion in premium, more than 130,000 clients and 13 locations.

Source: TD Bank Financial Group

Commerce Bancorp

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